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SAN FRANCISCO PUBLIC LIBRARY 



3 1223 03273 6549 




San Francisco Public Library 



- 
02 



REFERENCE BOOK 

Not to be taken from the Library 









HEARING 



SENATE RULES COMMITTEE 

STATE OF CALIFORNIA 




DOCUMENTS DEPT. 
JUN I 4 ms 

SAN FRANCISCO 
~UBLIC LIBRARY 



STATE CAPITOL 

ROOM 113 

SACRAMENTO, CALIFORNIA 

WEDNESDAY, MAY 19, 1999 
9:32 A.M. 



373-R 



SENATE RULES COMMITTEE 
STATE OF CALIFORNIA 



HEARING 



STATE CAPITOL 

ROOM 113 

SACRAMENTO, CALIFORNIA 



WEDNESDAY, MAY 19, 1999 
9:32 A.M. 



Reported by: 



Evelyn J. Mizak 
Shorthand Reporter 



4 49383 SFPL: ECONO JRS 
75 SFPL 06/06/03 7 



3 1223 03273 6549 



APPEARANCES 

MEMBERS PRESENT 

SENATOR JOHN BURTON, Chair 

SENATOR JOHN LEWIS, Vice Chair 

SENATOR JOE BACA 

SENATOR TERESA HUGHES 

SENATOR WILLIAM KNIGHT 

STAFF PRESENT 

GREG SCHMIDT, Executive Officer 

PAT WEBB, Committee Secretary 

NETTIE SABELHAUS, Consultant on Governor's Appointments 

WADE TEASDALE, Consultant to SENATOR LEWIS 

FELICE TANENBAUM, Consultant to SENATOR HUGHES 

ANDY PUGNO, Consultant to SENATOR KNIGHT 

MANNY HERNANDEZ, Consultant to SENATOR BACA 

ALSO PRESENT 

KATHLEEN M. HAMILTON, Director 
Department of Consumer Affairs 

SENATOR PATRICK JOHNSTON 

CARL BRAKENSIEK 

California Association of Licensed Repossessors 

BILL CAMP 

California Labor Federation, AFL-CIO 

DONNE BROWNS EY 

California Nurses Association 

GARY COOPER 

Hearing Health Care Providers of California 



Ill 



HOWARD OWENS 

Consumer Federation of California 

WILLIAM POWERS 
Congress of California 

KRISTY WIESE 

Planned Parenthood Affiliates of California 

LAURA STRAND 

Consumer Federation of California 

ROSEMARY SHAHAN 

Consumers for Auto Reliability and Safety 



IV 

INDEX 

Page 
Proceedings 1 

Governor ' s Appointees : 

KATHLEEN M. HAMILTON, Director 

Department of Consumer Affairs 1 

Introduction and Support by 

SENATOR PATRICK JOHNSTON 1 

Background and Experience 1 

Questions by SENATOR LEWIS re: 

LAO's Recommendation that Licensure 

Fees be Put into One Large Fund 4 

License Fees Directly Tied to 

Cost of Regulation 4 

Professions Which Might Be Ready For 

Abolition of Licensure 5 

Smog Check II 5 

Questions by SENATOR HUGHES re: 

Coordination between State and 

Local Consumer Affairs Departments 6 

Unlicensed and Illegal Medical 

Clinics Serving Immigrants 7 

Questions by SENATOR KNIGHT re: 

Smog Check II and Designation of 

High Desert Area 8 

Questions by CHAIRMAN BURTON re: 

Licensure of Dance Studios 9 



Questions by SENATOR BACA re: 

Relationship between Consumer Affairs and 

Consumer Law Section in Department of 

Justice 10 

Motion to Confirm 10 

Witnesses in Support: 

CARL BRAKENSIEK 

California Association of Licensed Repossessors 10 

BILL CAMP 

California Labor Federation, AFL-CIO 11 

DONNE BROWNS EY 

California Nurses Association 11 

GARY COOPER 

Hearing Health Care Providers of California 11 

HOWARD OWENS 

Consumer Federation of California 11 

BILL POWERS 

Congress of California 11 

KRISTY WIESE 

Planned Parenthood Affiliates of California 12 

LAURA STRAND 

Consumer Federation of California 12 

ROSEMARY SHAHAN 

Consumers for Auto Reliability & Safety 12 

Committee Action 13 

Termination of Proceedings 13 

Certificate of Reporter 14 



P-R-O-C-E-E-D-I-N-G-S 
— 00O00 — 

CHAIRMAN BURTON: The first order of business 
will be the confirmation of Kathleen Hamilton, Director, 
Department of Consumer Affairs. 

Senator Johnston. 

SENATOR JOHNSTON: Thank you, Mr. Chairman and 
Members . 

Kathleen Hamilton is on the job as the Director 
of Consumer Affairs. She comes with experience both in the 
legislative branch of government, where she's worked as a senior 
staff person, and also in the State Treasurer's Office, and has 
been in private business. Her skills and experience are known 
to you by looking at the material. 

I want to say on a personal level that I've known 
Kathy for two decades now, and she is tirelessly effective in 
pursuing public policy goals. And beyond that, she got me 
elected in 1980, when I won by 25 votes. 

[Laughter. ] 

SENATOR JOHNSTON: I'm very grateful to Kathleen 
Hamilton. 

MS. HAMILTON: Good morning, Mr. Chairman and 
Members. I'm Kathleen Hamilton. 

I'd like to begin what I promise will be very, 
very brief remarks by thanking Senator Johnston for his kind and 
revealing introduction. I try to keep my age a secret, but you 
seem to have revealed it. 

Mostly I want to thank the Senator for his 



friendship and wise counsel over the years. One of the reasons 
I'm not at all ashamed to be a career bureaucrat is because of 
the wonderful career that I've been fortunate to enjoy. It's 
afforded me enduring friendships and valuable mentors, and 
Senator Johnston is certainly one of the individuals I'm really 
pleased to call a friend and a tutor. So, thank you. 

I'm also honored to have been asked by Governor 
Davis to serve as his Director of the Department of Consumer 
Affairs. The job is an enormous challenge, but I'm fortunate to 
have had the opportunity to work in this area for many, many 
years and feel confident my experience and skills will serve the 
people of California well. 

Perhaps more importantly, however, this is an 
area of public policy that I care deeply about, and so I'm 
prepared and looking forward to the hard work that lies ahead. 

The Department has been described by one of my 
predecessors as Balkan-like. I've come to think of it with 
affection and an occasional shoulder shrug as the Winchester 
House of government. It's a complex conglomerate of only 
loosely connected authorities as diverse as registered 
geologists, guide dogs, boxers — the people, not the dogs — 
barbers, trade schools, and doctors and nurses. 

So, in these first few weeks, the logical 
question for me has been, what's the common thread; what is it 
we really do here? And it occurs to me the answer might be 
simple. Our job at the Department of Consumer Affairs is to 
ensure a level of professionalism and trust in the marketplace 
that protects and assures both business and consumers. And we 



have a duty to carry that out with common sense and fairness in 
a timely and responsive way. 

But we're not just bureaucrats. If the 
Department's essential circulatory system is its regulatory 
rubric, I think its true heart beat is in its broader mandate. 
And it is there we have the opportunity to make a difference. 
It's there where vision may matter more than vigilance, for 
clearly, part of our mission is to look ahead: What are 
tomorrow's marketplace challenges, and how do we prepare 
commerce and consumers for those challenge? 

Our job is to anticipate, and educate, and to 
shape the framework of the marketplace. And that is best done 
in an environment where all stakeholders know they have a place 
at the table. 

I look forward to re-engaging with California's 
consumer organizations, and to working with my colleagues in the 
other state and federal agencies that affect consumer 
transactions. Working together, I'm confident we can shape a 
Department that is vital, and responsive, and relevant. 

As I indicated in the statement I earlier 
submitted to the Committee, I've come to value collaboration, 
creativity, and common sense. As the oldest of eleven children 
growing up, and a single parent of my college student daughter, 
Megan, I have surely learned the inevitability of occasional 
compromise and the value of team work. 

Mr. Chairman and Members, I appreciate this 
opportunity to meet with you this morning, and look forward to 
working with you in the months and years ahead. 



Thank you. 

CHAIRMAN BURTON: Senator Lewis. 

SENATOR LEWIS: Good morning. 

MS. HAMILTON: Good morning. 

SENATOR LEWIS: Apparently the LAO has 
recommended that licensure fees that are collected be rolled 
into one large fund. 

What do you think of that proposal? 

MS. HAMILTON: I think that the industries that 
are licensed in the Department of Consumer Affairs are entitled 
to have their revenues accounted for and directed in a focused 
way and very specifically to the programs that serve their 
profession. 

The Department does utilize consolidation and 
centralization of certain services that provide assistance to 
all the licensing programs when it's cost effective. 

SENATOR LEWIS: Along that line, do you think 
that the license fees should be directly tied to the cost of 
regulating that particular service? 

MS. HAMILTON: I think that what the professions 
are assessed in the way of license fees ought to reflect what 
the cost of regulating their professions and running the program 
that they expect the Department to run — 

SENATOR LEWIS: You don't want the state to turn 
a profit on it; do you? 

MS. HAMILTON: Oh, no. I think we ought to be a 
bargain. 

SENATOR LEWIS: Are there any other professions 



that we currently license out of the 200 or so that you think 
might be ripe now for abolition of licensure. 

MS. HAMILTON: I'm sorry, for — 

SENATOR LEWIS: Doing away with licensure? 

MS. HAMILTON: No. We're looking at all of them. 
As you know, there's a proscribed schedule for sunset review, 
and the Department's actively engaged in that on an ongoing 
basis, and we're constantly reviewing those programs. Nothing 
jumps out ahead at the moment. 

SENATOR LEWIS: I wanted to ask you just a quick 
question about Smog Check II. 

Is it true that more cars are failing in the 
basic areas as opposed to the enhanced areas as of this moment? 

MS. HAMILTON: I don't have that information. 
I'd be happy to get the specific data for you, Senator Lewis. 

As you may know, the Department, and BAR, and 
the ARB has recently initiated an agency-wide task force that's 
currently looking at a wide range of data, including those kinds 
of questions, to assess where the program's successful, where it 
may need some improvements, and what kinds of tinkering we may 
need to do with the program in the months ahead. 

SENATOR LEWIS: I'd be interested if you could 
get back to the Committee on that. 

The other question I have is just that staff 
informs me that in order to meet the federal requirement of 
removing 112 tons of pollutants a day from mobile sources, that 
works out that you'd have to fail 30 percent of California cars 
during tests. Is that right? 



MS. HAMILTON: There are varying projections of 
that. I've heard as high as 36, and we've heard as low as 18 
percent. The truth probably lies somewhere in the middle. 

SENATOR LEWIS: Thank you. 

CHAIRMAN BURTON: Senator Hughes. 

SENATOR HUGHES: Good morning. 

MS. HAMILTON: Good morning. 

SENATOR HUGHES: Half of the complaints that I 
get from consumers and constituents in my district is because 
they don't know where to go, so they come to the Senator because 
it sounds like, with the title, I ought to be able to clear it 
all up. 

The problem is because the local agencies are not 
taking care of the problem, and the state agency is more 
elitist, and they don't go to the state. 

Have you thought about or do you plan on having 
some coordination between the state and the local consumer 
affairs departments? 

MS. HAMILTON: I really appreciate your question, 
Senator Hughes. 

Secretary Adams and I recently held a meeting 
with a wide range of consumer organizations, including a handful 
of local agencies that serve California's consumers. 

One of the outcomes of that meeting was to talk 
about ways to enhance our ability to share information and to 
work more closely with those organizations, including 
participating in each other's conferences, but also looking at 
our Web sites and Internet capabilities for ensuring that we're 



not duplicating efforts, and that consumers have every 
opportunity to get help when they need it. 

SENATOR HUGHES: What I do in my office, and I 
don't know how many other Legislators do that, when they call 
with complaints, and my staff knows that it's a local agency 
thing, we don't tell them to go to the local agency. My staff 
contacts the local agency and tries to be the bridge that goes 
between the consumer and the agency involved. 

The other thing that I was concerned about, the 
number of immigrants that we have coming to our state who are 
ill-informed and are victims of local medical clinics that may 
be unlicensed and won't give good care. And the fact that back 
in February, there was an 18-month-old child that died because 
of treatment by an illegal unlicensed medical clinic in Southern 
California. 

What can the Department do to ensure that these 
kinds of things don't continue to happen? 

MS. HAMILTON: There's a couple of things, I 
think, the Department can do, and I'm pleased to tell you that 
we've already begun doing both of them. 

In the general area of education, the Department 
has a language link library where a wide range of consumer 
education materials are available in multiple languages, and 
we'll continue to expand that resource in the Department. 

In the particular situation that you mentioned, 
the Medical Board, which is one of the boards within the 
Department of Consumer Affairs, has created a local, state and 
federal task force involving several law enforcement offices and 



8 

U.S. Customs, to try to get at the heart of the problem that 
seems to be occurring in some of our immigrant communities in 
California with unlicensed medical care. 

I'm told that the practitioner you described has 
not been identified and hasn't been located, but there's a very 
energetic law enforcement effort underway to try to stop that 
practice. 

SENATOR HUGHES: Thank you very much. 

CHAIRMAN BURTON: Senator Knight. 

SENATOR KNIGHT: Thank you, Mr. Chairman. 

Ms. Hamilton, Smog Check II is probably one of, 
as far as constituents are concerned, one of the biggest 
problems we have. I think it's because of the area. We've been 
designated an enhanced area, but not in City of Palmdale or 
Lancaster, which are both over 120,000, but the whole high 
desert. That's one of the few areas that is designated that way 
Fresno is just Fresno, Bakersfield is just Bakersfield not the 
whole county. 

Is there any possibility that we can change 
that?, 

MS. HAMILTON: Well, as you probably know, the 
Smog Check program is enormously complex, and it actually is 
constituted by an agreement involving several state agencies as 
well as Federal EPA. So, changes to the state's implementation 
plan, which is what I believe would have to occur to re-evaluate 
the areas, would be part of a complex process of bringing that 
issue up with the feds and with our sister state agencies, who 
all have respective roles. 



9 

One of the things that we will be doing, as you 
know, is evaluating in February, 2000, how successfully we've 
been able to meet the clean air goals that we established when 
we first entered into the state's implementation plan. I think 
our hope is that in February of 2000, we'll have sufficient data 
to begin to re-evaluate both the way we catagorize potentially 
areas of the state, as well as we way we administer the 
program. 

So, if I have any information that I stumble on 
sooner than in February, 2000, I'll be happy to talk to you 
further about it, but I think that's probably the plan that will 
be followed. 

CHAIRMAN BURTON: I think it's Senator Alpert 
has some legislation involving licensure of dance studios. And 
I guess there's a concern in your office as to whether or not 
you have to recuse yourself and turn it over to somebody else. 

[ Laughter . ] 

MS. HAMILTON: Senator Burton's revealed another 
secret of my past, which is that I was a theater arts major. 

Senator, anyone that ever worked with me in a 
theatrical production will tell you they carried me all the way 
across the stage. I can't dance to save my life. 

[Laughter. ] 

CHAIRMAN BURTON: That's a maybe. 

Senator Baca. 

SENATOR BACA: Kathy, my guestion's a simple one. 
What will the relationship be between the Department of Consumer 
Affairs and the Consumer Law Section in the State Department of 



10 

Justice? 

MS. HAMILTON: I hope a really good, cooperative, 
collaborative relationship. In fact, we've begun some of that, 
working very closely with the Department of Justice to try to 
resolve some outstanding Medical Board issues in terms of 
practice, and licensure, and fees, and those kinds of things. 

One of my early jobs in the area of consumer 
affairs was, I was a consumer fraud investigator in the 
Department of Justice, working for Herschel Elkins, who still 
heads up the Consumer Fraud Section. And one of the happy 
discoveries as I've taken on this job is to realize how many 
individuals are still working at all of these important 
locations, and how devoted they are to addressing the concerns 
that we all care about so much. 

So, I look forward to a close working 
relationship in a way that also enables us to really maximize 
the utilization of our resources. We're all aware that we don't 
have enough to do everything we want, and my hope is that if we 
make some of the these decisions and choices together, we'll be 
particularly successful. 

SENATOR BACA: Thank you. 

CHAIRMAN BURTON: Do you have anybody you want 
to introduce? 

MS. HAMILTON: I don't. 

SENATOR HUGHES: I'd like to move it then. 

CHAIRMAN BURTON: Witnesses in support briefly. 
Name and organization. 

MR. BRAKENSIEK: Carl Brakensiek, on behalf of 



11 

the California Association of Licensed Repossessors. 

We're in strong support of her nomination. We've 
had a very good meeting with her. She's very understanding. She 
has a very good consumer protection background and is also 
understanding of the needs of industry. So, we think she will 
be a very fair regulator. 

Thank you. 

MR. CAMP: Mr. Chairman, Bill Camp, with the 
California Labor Federation, AFL-CIO. 

We support this nominee 100 percent and ask for 
your aye vote. 

MS. BROWNSEY: Donne Brownsey with the California 
Nurses Association. 

It's wonderful to stand here to honor a dear 
friend. And Kathy has been a patient advocate for many, many 
years. We're very pleased to support her confirmation today. 

MR. COOPER: Gary Cooper, representing Hearing 
Health Care Providers of California. 

We're very strongly supporting Ms. Hamilton's 
nomination. 

Thank you. 

MR. OWENS: I'm Howard Owens with the Consumer 
Federation of California. 

We've already seen the way that Ms. Hamilton's 
hit the ground running and an outreach to consumers that hasn't 
been around for quite a while, and we support and ask for an aye 
vote. 

MR. POWERS: Bill Powers, Congress of California, 



12 

also strongly in support of this nomination. 

MS. WIESE: GoodAfcristy Wiese of Planned 
Parenthood Affiliates of California. 

On behalf of the over 100 Planned Parenthood 
Clinics throughout California, we are thrilled to have the 
opportunity to enthusiastically support Ms. Hamilton's 
confirmation. 

MS. STRAND: Laura Strand with the Consumer 
Federation of California. 

We're in strong support of her nomination, and we 
look forward to a very long, a close relationship with 
Ms. Hamilton. 

Thank you. 

MS. SHAHAN: Mr. Chairman and Members, I'm 
Rosemary Shahan from Consumers for Auto Reliability and Safety. 
We work on the state and federal levels on auto issues on behalf 
of moderate and low income consumers. And we think the Governor 
couldn't have made a better choice, and we urge your aye vote. 

Thank you. 

CHAIRMAN BURTON: Any witnesses in opposition? 

Moved by Senator Hughes, call the roll. 

SECRETARY WEBB: Senator Baca. 

SENATOR BACA: Aye. 

SECRETARY WEBB: Baca Aye. Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator Lewis. 



13 



SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 
CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Five to zero. 
CHAIRMAN BURTON: Congratulations. 
MS. HAMILTON: Thank you. 
[Thereupon this portion of the 
Senate Rules Committee hearing was 
terminated at approximately 9:52 A.M.] 
— 00O00 — 



14 
CERTIFICATE OF SHORTHAND REPORTER 

I, EVELYN J. MIZAK, a Shorthand Reporter of the State 
of California, do hereby certify: 

That I am a disinterested person herein; that the 
foregoing transcript of the Senate Rules Committee hearing was 
reported verbatim in shorthand by me, Evelyn J. Mizak, and 
thereafter transcribed into typewriting. 

I further certify that I am not of counsel or 
attorney for any of the parties to said hearing, nor in any way 
interested in the outcome of said hearing. 

jj IN WITNESS WHEREOF, I have hereunto set my hand this 
I I day of / -t*^ , 1999. 





IZAg) 



Shorthand Reporter 



373-R 

Additional copies of this publication may be purchased for $3.00 per copy 
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Senate Publications 

1 020 N Street, Room B-53 

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(916)327-2155 

Make checks payable to SENATE RULES COMMITTEE. 
Please include Stock Number 373-R when ordering. 



^ HEARING 

SENATE^RULES COMMITTEE 

STATE OF CALIFORNIA DOCUMENTS DEPT 

JUN 1 4 J999 

SAN FRANCISCO 
PUBLIC LIBRARY 




STATE CAPITOL 

ROOM 113 

SACRAMENTO, CALIFORNIA 

WEDNESDAY, MAY 26, 1999 
9:03 A.M. 



374-R 



SENATE RULES COMMITTEE 
STATE OF CALIFORNIA 



HEARING 



STATE CAPITOL 

ROOM 113 

SACRAMENTO, CALIFORNIA 



WEDNESDAY, MAY 26, 1999 
9:03 A.M. 



Reported by 



Evelyn J. Mizak 
Shorthand Reporter 



APPEARANCES 

MEMBERS PRESENT 

SENATOR JOHN BURTON, Chair 

SENATOR JOHN LEWIS, Vice Chair 

SENATOR JOE BACA 

SENATOR TERESA HUGHES 

SENATOR WILLIAM KNIGHT 

STAFF PRESENT 

GREG SCHMIDT, Executive Officer 

PAT WEBB, Committee Secretary 

NETTIE SABELHAUS, Consultant on Governor's Appointments 

WADE TEASDALE, Consultant to SENATOR LEWIS 

FELICE TANENBAUM, Consultant to SENATOR HUGHES 

DAVID OROSCO, Consultant to SENATOR KNIGHT 

MANNY HERNANDEZ, Consultant to SENATOR BACA 

ALSO PRESENT 

ROY A CASTRO, Warden 

High Desert State Prison, Susanville 

FRANK R. SEARCY 

RICHARD E. EARLY, Warden 

North Kern State Prison at Delano 

SUZANNA AGUILERA-MARRERO, President 
Chicano Correctional Workers Association 

CHERYL K. PLILER, Warden 
California State Prison, Sacramento 



Ill 
INDEX 

Page 
Proceedings 1 

Governor ' s Appointees : 

ROY A. CASTRO, Warden 

High Desert State Prison, Susanville 1 

Background and Experience 1 

Questions by SENATOR KNIGHT re: 

High Recidivism Rate 2 

Questions by SENATOR BACA re: 

Reasons for High Recidivism 3 

Drug Use in Prisons 3 

Staff Access to Warden 4 

Ethnic Make-up of Staff 5 

Questions by SENATOR HUGHES re: 

Effectiveness of Women's Prisons 

Compared to Men' s Prisons 6 

Proportion of Male Officers in 

Women ' s Prisons 7 

Effectiveness of Female Correctional 

Officers in Male Institutions 7 

Effectiveness of Educational 

Programs to Prevent Recidivism 8 

Employee Retaliation Issues 9 

Questions by SENATOR LEWIS re: 

Problem of Overcrowding 10 



IV 



Reasons Inmates Choose Not to 

Participate in Education or Work 

Programs 11 

Motion to Confirm 11 

Questions by SENATOR KNIGHT re: 

Base Figures for Designated 

Capacity 12 

Witness in Support: 

FRANK R . SEARCY 12 

Committee Action 14 

RICHARD E. EARLY, Warden 

North Kern State Prison at Delano 14 

Background and Experience 14 

Questions by SENATOR HUGHES re: 

Increase of Incidence of Contagious 

Diseases in Prisons 15 

Ability of Staff to Talk to 

Warden 16 

Drug Use at Institution 16 

Whistle-blowing Protections 17 

Questions by SENATOR BACA re: 

Educational Institutions Attended 

By Appointee 18 

Reducing Drugs in Prisons 19 

Ethnicity of Staff 20 

Questions by SENATOR KNIGHT re: 

Small Number of Inmates Participating 

In Academic and Vocational Programs 20 



Questions by CHAIRMAN BURTON re: 

How Drugs Get into Prisons 21 

Ideas about Programs that Might 

Prevent Recidivism 22 

Availability of Educational Programs 22 

Reason for Waiting List 23 

Motion to Confirm 24 

Questions by SENATOR BACA re: 

New State Requirement of 9 th Grade Reading 

Level before Parole Can Be Granted 25 

Discussion 25 

Witnesses in Support: 

SUZANNA AGUILERA-MARRERO, President 

Chicano Correctional Workers Association 2 6 

FRANK R. SEARCY 27 

Committee Action 28 

CHERYL K. PLILER, Warden 

California State Prison, Sacramento 28 

Background and Experience 28 

Questions by SENATOR HUGHES re: 

Any Staff Complaints 29 

Problems with Male Correctional Officers 
Supervising Female Prisoners 3 

Major Cause of Recidivism 31 

Questions by CHAIRMAN BURTON re: 

Recidivism Rate 32 



VI 



Waiting Lists to Fulfil Parole 

Requirements 32 

Cost of Hiring Teachers 33 

Less Violence with Older Prisoners 34 

Questions by SENATOR LEWIS re: 

Length of Time to Get Off Waiting 

List and into Classes 3 5 

Questions by SENATOR BACA re: 

New Requirement of 9 th Grade Reading 

Level for Parole Consideration 3 6 

Criteria for Inmates to Get into 

Educational Programs 3 6 

Steps to Reduce Drugs in Prison 37 

Overcrowding of Prison 38 

Need for Policy Changes to 

Reduce Overcrowding 39 

Ethnic Diversity of Staff 39 

Questions by SENATOR KNIGHT re: 

Filing of Frivolous Lawsuits 40 

Motion to Confirm 41 

Witnesses in Support: 

FRANK R . SEARCY 41 

SUZANNA AGUILERA-MARRERO, President 

Chicano Correctional Workers Association 42 

Committee Action 43 

Termination of Proceedings 43 

Certificate of Reporter 44 



P-R-O-C-E-E-D-I-N-G-S 
— 00O00 — 

CHAIRMAN BURTON: The first person, Governor's 
appointee for today, is Roy A. Castro, Warden of High Desert 
State Prison at Susanville. 

MR. CASTRO: Good morning, Senators. My name is 
Roy Castro. I was appointed as Warden of High Desert State 
Prison in July of 1998. 

I began my career in 1971 as a correctional 
officer at Deuel Vocational Institution at Tracy. I transferred 
eight times while promoting through the custody ranks and 
accepting more difficult assignments. 

My experience includes the activation of two new 
prisons, assisting in the development of the Special Emergency 
Response Teams at Deuel Vocational Institution and Sierra 
Conservation Center, and the activation of a new 1,000-bed Level 
III facility at Sierra Conservation Center. 

These assignments allowed me to demonstrate my 
strong leadership abilities. I've also attended a number of 
Departmental ly-approved management training courses which has 
honed my management skills and developed good communication and 
organizational abilities. 

Throughout my career, I have maintained 
outstanding working relationships with all divisions within the 
Department, the public, and outside agencies. 

I bring to my present assignment a strong 
commitment for working closely with the neighboring communities 
and providing a safe and secure environment for staff to work 



and inmates to serve their sentences. 

Thank you. 

SENATOR LEWIS: Thank you very much, Mr. Castro. 

We'll probably open it up for questions. 

Do you have anyone in the audience, any family 
members, that you've brought with you that you'd care to 
introduce? 

MR. CASTRO: I have my wife of almost 25 years, 
Debby; my niece Michelle from Brentwood; my sister Gloria from 
to Stockton; and my Aunt Esther from Stockton. And I have also 
Savannah and Mackensey as part of my niece's family and nephews. 

SENATOR LEWIS: Welcome to Sacramento. 

Questions from Members of the Committee, Senator 
Knight. 

SENATOR KNIGHT: Roy, CDC figures indicate that we 
have a 58 percent recidivism rate, and it indicates that that's 
probably one of the highest ones in the nation. 

Do you have any ideas as to why we • re so high? 

MR. CASTRO: I do — no, I don't, Senator. 

I do know that within the prison system, we try 
to offer as many programs available as possible to the inmates. 

SENATOR KNIGHT: Does that mean it's a good deal? 

MR. CASTRO: I don't believe so. I believe when 
the law changed to Three Strikes, I believe the inmates that are 
doing longer sentences are now in prison. I think we're 
removing them from the streets. I think the drop in the 
violence on the streets is indicative of that. 

I can't say why recidivism is so high. I do know 



that in our Department, we're always looking for ways to improve 
and programs to implement in order to better prepare the inmates 
for release. 

SENATOR KNIGHT: Thank you. 

SENATOR LEWIS: Senator Baca. 

SENATOR BACA: Roy, one of the other reasons, 
too, that you have people returning, would you say that that 
applies to probably almost every one of the prisons is that 
people probably feel that they can't really make it in society, 
and that they feel a lot more comfortable and a lot better in 
the prisons, and that's another reason why some of them even 
return? 

MR. CASTRO: The sad thing for right now is that 
in talking with the inmates out there, and some of the feedback 
I get, is that the situations on the streets for inmates that we 
do release are worse than their situation in prison. At least 
in prison, they know what to expect from us. On the streets, 
they don't know what to expect. And sometimes, the conditions 
are quite a bit better than what they are involved in on the 
streets . 

SENATOR BACA: What are you doing to reduce drug 
use in prison? Has drug use increased or decreased in your 
experience or to your knowledge? 

MR. CASTRO: In my experience, I don't believe 
the drug use has increased. I have done — at High Desert, I 
have done everything I can to reduce drugs within the prison. 

We do have a Scantron 1000, and visitors are — 
need to pass through in order to go inside the prison. This is 



a very good tool to identify contraband coming inside the 
prison. 

We also monitor telephone conversations, which 
has been extremely effective at High Desert. We have made a 
number of arrests on visitors coming in to bring drugs. 

We also x-ray packages and mail that comes inside 
the prison. 

A lot of our violence is as a result of drug 
deaths within the prison, but I don't believe it has increased. 
I believe it's dropped since I've been at High Desert State 
Prison. 

SENATOR BACA: What kind of a relationship do you 
have, or do you believe in an open-door policy, because some of 
the members, staffers or others, believe that they've got to 
have access. A lot of the inmates have access to a lot of guys. 

What is your policy in reference to staffers 
being able to communicate if, in fact, they have a problem, or 
want to identify a problem, or just communicate, or upward 
mobility? 

MR. CASTRO: I have — monthly I have warden's 
forums that I hold with line staff. Also supervisors, I hold 
meetings with them separately on the forums, and managers. 

I walk inside the prison without anyone with me. 
That way, I believe it makes the inmates more comfortable in 
talking to me when I walk through the prison. It also 
makes the staff more comfortable when I go to their assignments 
and talk to them while they're doing their jobs. 

I do meet with all new employees when they first 



report to High Desert. I let them know what my policies are, 
and one of them is an open-door policy. If they have an issue 
that they feel is important to them, that they need to elevate 
to my level, I always make the time, and tell them to make an 
appointment and come in and see me. 

SENATOR BACA: One final question. 

What is the diversity or make-up of your staff? 

MR. CASTRO: First, I think I need to make clear 
that High Desert State Prison located in the northeastern 
portion of the state. There's not much of a minority make-up in 
that area on the population wise. 

And my staff currently at High Desert is 84 
percent Caucasian. I have approximately 2 percent Black staff, 
and 9.3 percent are Hispanics. 

SENATOR BACA: Hopefully we can work on improving 
those statistics or numbers. I know that it's difficult in that 
high desert area, but who knows. That's an area we've got to 
work to improve. 

MR. CASTRO: I agree, Senator. And I just signed 
off on — I just promoted two minorities and correctional 
lieutenants this past week. I think they will be fine people in 
their position. 

SENATOR BACA: Thank you. 

SENATOR LEWIS: Senator Hughes. 

SENATOR HUGHES: Good morning. 

MR. CASTRO: Good morning. 

SENATOR HUGHES: I understand that you were at a 
women's prison, Central California Women's Facility, for about a 



year as a program administrator. 

In your experience, how effective are the women's 
prisons as compared to the male prisons, or did you see any 
difference? 

MR. CASTRO: There's a vast difference. 
Actually, I was there for approximately three-and-a-half years 
as a correctional captain. I activated that, and then I 
lateral led over to program administrator. 

The women are completely different than dealing 
with the men. The gangs aren't as big a problem. 

I believe drugs are a much larger issue with 
females, along with medical issues. 

SENATOR HUGHES: They are? 

MR. CASTRO: Yes. 

SENATOR HUGHES: Why do you think? 

MR. CASTRO: Senator, I really can't say, but I 
do know that the females seem to have more medical issues than 
the male population. I know our costs for medical was really 
skyrocketing at Central California Women's Facility. I believe 
it's the same at all the female institutions. 

SENATOR HUGHES: You felt that they needed more 
sedation, or do you feel that the drugs were just running more 
rampant? 

I didn't mean to be funny. I was serious when I 
asked that. 

MR. CASTRO: Not needing more sedation. I think 
they have more physical problems than the male inmates do. 

SENATOR KNIGHT: It's called the weaker sex. 



SENATOR HUGHES: You may be excused. You need no 
more per diem because you just blew it. 

SENATOR LEWIS: Strike that from the record. 

SENATOR HUGHES: Better yet, strike him. But 
since I'm not violent, I wouldn't even attempt to do it. 

Do you have male correctional officers? In what 
proportion do you have males and females in these women's 
prisons? 

MR. CASTRO: In the women's prisons? 

SENATOR HUGHES: Yes. 

MR. CASTRO: I believe while I was at CCWF, we 
were very successful in recruiting females. And I believe when 
I was there as a captain, we were up close to 40 percent, and 
our target was like 46 percent female. 

SENATOR HUGHES: How effective are the women 
correctional officers in the predominantly male institutions 
that you've worked in? 

MR. CASTRO: I believe the female correctional 
officers are every bit as effective as the male correctional 
officers. There is not one area of the prison that they're not 
allowed into or not assigned to. 

And I believe with the training that has gone on 
with the Department since we first started hiring female 
correctional officers in 1973, I think those programs have been 
effective. 

And I believe the male officers have finally — 
their level of confidence has grown. 

Actually, I've seen where, in some instances, 



8 

where females are much more effective than males in dealing with 
incidents. 

SENATOR HUGHES: How do you mean they're more 
effective? Are they more persuasive in getting them to be 
cooperative? What do you mean by more effective? 

MR. CASTRO: I believe in some instances, it's 
sometimes disconcerting to an inmate to confront a female 
officer, where they would not hesitate to confront a male 
officer, because of the fact that I don't feel that they feel 
there's a challenge to them there. Not in a negative way, but 
there's not a challenge to their manhood by confronting a 
female. 

SENATOR HUGHES: I think that's probably a very 
good observation. 

We were talking about recidivism before. What 
about the educational programs and vocational programs that you 
have in the institutions? How effective do you think they are, 
and do you feel that it should make a difference in terms of the 
recidivism, especially those people who have shorter terms to 
serve? 

MR. CASTRO: I think they're very effective. I think 
it gives the inmates a sense of accomplishment when they do get 
their GED. 

I know the staff that work for me at High Desert 
State Prison in the Education Department are very excited about 
their jobs. They're very positive. They see results in that 
inmates are graduating. 

Right now I have, I believe, it's 13 or 14 



9 

academic classes going, and 16 vocational programs that are on 
line and operating now. 

SENATOR HUGHES: Inmates that have been through 
their program, have they been the ones to return more frequently 
to the institution, or to return less frequently, from what you 
can remember? 

MR. CASTRO: From what I can see, usually the 
ones that complete a vocational program and have better tools to 
operate with when they get on the streets, there's less of 
recidivism among those inmates than the inmates that come in and 
don't want to accomplish anything and get involved with the 
gangs and hit the street. 

SENATOR HUGHES: I've had a lot of meetings with 
your Director, Mr. Terhune. He has indicated to me that the 
Department has very low tolerance for retaliation against 
employees who complain. 

As a warden, do you feel that the employees feel 
more comfortable about coming forward with complaints at your 
institution, or are they still sort of reluctant in a way? 

MR. CASTRO: You know, I hope we don't have any 
complaints. However, when they do come forward, I think with 
the training that we have provided, and we do reinforce that at 
every level, that there is no tolerance at all for retaliation, 
that the staff, I feel, at least feel safer in coming forward 
and voicing their concerns. 

SENATOR HUGHES: What do you do to make them feel 
free to come and talk to you? 

MR. CASTRO: When an employee has an issue that 



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they want to bring forward to my level, they contact my 
secretary. And a whatever I have on my calendar, I clear. 

I do make every effort to see every employee that 
comes to my office. 

If they don't feel comfortable in coming to my 
office, I do make periodic walks through the institution. I try 
to touch as many areas as I can, talking to staff while they're 
working. I walk the yards talking to inmates. 

The staff — it's my feeling's that the staff 
feel comfortable in coming to me in either one of those. Also, 
I have the warden's forums where the agenda is wide open, and 
there's no issue that I tell them that we won't discuss at the 
warden's forums. Whatever they want to talk about, that's what 
we talk about. 

SENATOR HUGHES: Thank you. 

SENATOR LEWIS: Mr. Castro, how much of a problem 
is overcrowding at your institution, and how are those problems 
manifested? 

MR. CASTRO: Right now, I believe the base 
occupancy rate for High Desert is at 2224 inmates. We're 
currently at about 4150 inmates, approximately 190 percent 
overcrowding . 

Of course, the issues arise because we don't use 
our gymnasiums because we have now inmates in there. So, that's 
one area that the inmates don't get to go in and utilize fully. 
We do have the yards still open. 

The yards are a little bit more crowded. It 
takes a little bit longer for the inmates to get through and 



11 

get, like, their canteens, get around to utilizing the services 
that we have inside. 

At this point, there's no significant problems 
arising from our being at that level of population. I think 
we're handling it very well. 

SENATOR LEWIS: Great. 

You have a number of inmates that participate in 
work programs, and then also academic and vocational programs as 
well. 

But what about the balance that don't choose to 
participate in anything? Have you surveyed those folks? Do you 
have kind of a ranking of reasons why they choose not to avail 
themselves of those programs? 

MR. CASTRO: No, Senator, I don't. I do know 
that they are seen every 30 days in regards to their programming 
if they choose to not program at all. Currently, at High Desert 
State Prison, I have 57 inmates that are — it's called C over C 
status, where they're not allowed — they don't want to work, so 
they're activities are reduced in regards to the inmates that 
are working. 

But as far as the issues that they have, I 
haven't taken a survey of that, no. 

SENATOR LEWIS: Thank you. 

Senator Baca. 

SENATOR BACA: I'd like to move the nomination of 
Roy Castro. 

SENATOR KNIGHT: Could I ask one question? Thank 
you, Mr. Chairman. 



12 

Roy, you indicated the prison was built for a 
little over 2,000 inmates. Is that one per cell, or how do you 
figure that? 

MR. CASTRO: Originally, when they do the base 
figures, it is one inmate per cell, yes. 

SENATOR KNIGHT: So, when you're up to 4,000, 
that means you have two in a cell? 

MR. CASTRO: Yes. 

SENATOR KNIGHT: That's where you get the 188 
percent capacity? 

MR. CASTRO: Yes. 

SENATOR KNIGHT: Thank you. 

SENATOR LEWIS: Okay, keeping in mind that we're 
not aware of any opposition to Mr. Castro's appointment nor the 
other two wardens that are up before us today, at this point 
we'd like to welcome anyone who would like to give testimony in 
support of the nomination. 

MR. SEARCY: Good morning, Committee Members. I 
am Frank R. Searcy, and I offer my support for Mr. Castro as 
Warden of the High Desert State Prison. 

I've known Mr. Castro for several years. His 
demonstrated abilities have proven that he can administer as a 
warden. 

What's also very significant, I offer, is his 
assignments at varying institutions, especially when it comes to 
the women's prison. That type of experience, and with the other 
institutions assignments, only enhances his administrative 
abilities. 



13 

But also very noticeable is his willingness to go 
out within the inmate population and speak with them, and make 
himself available for their questions and also for staff. 

So again, as a friend of Mr. Castro, I offer my 
support . 

Thank you. 

SENATOR LEWIS: Thank you. 

SENATOR KNIGHT: You don't represent anybody else 
other than yourself? 

MR. SEARCY: That's right, sir. 

SENATOR KNIGHT: Okay, thank you. 

SENATOR LEWIS: Anyone else in the audience 
wishing to testify? 

Anyone else in the audience wishing to testify in 
opposition to the nomination? 

We have a motion. Secretary, please call the 



roll 



SECRETARY WEBB: Senator Baca. 

SENATOR BACA: Aye. 

SECRETARY WEBB: Baca Aye. Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

Four to zero. 

SENATOR LEWIS: We'll place that measure on call 



14 

for Senator Burton. 

Congratulations . 

MR. CASTRO: Thank you. 

[Thereafter, CHAIRMAN BURTON 
added his Aye vote, making 
the final vote 5-0 for 
confirmation. ] 

SENATOR LEWIS: Mr. Richard Early. 

Good morning. 

MR. EARLY: Good morning, Mr. Chairperson, Senate 
Rules Committee Members, and guests. 

I am Richard Early, Warden appointee at North 
Kern State Prison in Delano. Thank you for giving me this 
opportunity to come before you. 

My professional experience in the correctional 
setting began June 18, 1974 as a youth counselor at the 
California Youth Authority facility, El Paso de Robles School at 
Paso Robles, California. 

Since that time, I have occupied and have been 
promoted in a variety of assignments, such as senior youth 
counselor, parole agent I, correctional lieutenant, correctional 
counselor I, correctional counselor II, correctional captain, 
program administrator, associate warden, chief deputy warden, 
and to my current position of warden appointee. 

I have worked in a variety of work locations. In 
addition to Paso Robles, I have worked at facilities in 
Whittier, San Luis Obispo, Stockton, Jamestown, Vacaville, 
Susanville, Blithe, and Delano. 



15 

My formal education consists of possessing a 
Bachelor of Arts Degree in political science from the University 
of California at Riverside, and a Master of Arts Degree in 
education, with a specialization in counseling and guidance from 
Cal Poly State University at San Luis Obispo. 

The institution that I currently oversee houses 
at 200 percent overcrowding: 5,288 inmates; and employs 1,254 
staff members; 3,976 of the beds are dedicated to our reception 
processing unit, where inmates are primarily received from Los 
Angeles, Riverside, Tulare, Madera, Monterey, and San Benito 
County . 

My main objective is to maintain the public 
safety in an efficient manner, making North Kern State Prison a 
meaningful and safe working place for employees, a beneficial 
and safe place for inmates to serve their sentence, and a 
valuable neighbor serving the community. 

Thank you. 

SENATOR LEWIS: Lewis thank you very much. 

Questions from Members? Senator Hughes. 

SENATOR HUGHES: Good morning. 

MR. EARLY: Good morning. 

SENATOR HUGHES: I'd like to know if you feel 
that the increase in the incidence of contagious diseases, such 
as tuberculosis, has added to problems of your operation, or are 
you aware of that? 

MR. EARLY: I have not experienced any 
significant problems at my institution. 

SENATOR HUGHES: So, you don't have a significant 



16 

amount of any contagious diseases? 

MR. EARLY: No. 

SENATOR HUGHES: What about the ability of your 
staff to be able to talk to you? How do you handle that? How 
do you know when they feel free and comfortable to come to you 
and complain? 

MR. EARLY: First of all, I do a lot of walking 
around my institution also. And when I meet with my staff, I 
let them know that I also have an open-door policy, and that 
they don't — they do not even have to make a schedule to come 
in and talk to me. So, I have an open-door policy, and usually 
80 to 90 percent of the time, when they arrive at my office, I'm 
able to have them come in and we can have our discussion. 

SENATOR HUGHES: What about drug use in your 
institution? 

MR. EARLY: We have recently established a 
computer-based program where we cross-reference outgoing 
packages, money orders coming into the institution, money going 
out of the institution. And we cross-reference all of that 
information. 

As a result of that, most recently we were 
successful in arresting a visitor from Los Angeles County, where 
she had been soaking computer paper with meth, and typing a 
letter on the paper, and shipping it into the institution. 

We were able to gather the intelligence based on 
us compiling all that information, and monitoring telephone 
calls, and we were able to go and arrest that person. 

And also, we were able to get a search warrant 



17 

and get the computer in our custody, and we were able to 
identify her writing to eleven other institutions. And we are 
gathering further intelligence as far as other inmates involved 
in the system also being involved in bringing drugs in. 

SENATOR HUGHES: Then, did you consequently share 
this information with other wardens so they could be alerted to 
this new system? 

MR. EARLY: That's correct. 

SENATOR HUGHES: See how smart women are? 
[ Laughter . ] 

SENATOR KNIGHT: Was that a woman that was doing 



that? 



MR. EARLY: Yes, it was. 

We work very closely with the Kern County D.A.'s 



office, 



SENATOR HUGHES: What kind of whistle blowing 
protection do you have to ensure your staff that they can feed 
to you information, and you are a confident, and you will watch 
out for them? 

MR. EARLY: Once you've received information from 
staff, all types of discipline, staff discipline, whether it's 
informal or formal, has to come through my office. That's 
something that I do monitor to ensure that if someone has 
provided me some information, that there is no supervisor that's 
going to take inappropriate actions against that employee. 

SENATOR HUGHES: What would you do if you had 
been told that another employee was basically discriminating or 
attacking someone else who had been an informant? What would 



18 

you do, not really knowing whether it was fact or fiction? How 
would you go about it? 

MR. EARLY: First of all, I'd open up a 
formalized investigation, because it's the only way that you 
could gather any information to make a determination whether 
there is some merit to the information that was provided to me. 

SENATOR HUGHES: But then, how do you really know 
that the person isn't imagining it, and suppose the person says, 
"Well, they're picking on me because I'm an ethnic minority," 
and you should understand how it is when you're an ethnic 
minority, then what do you really do? You feel sensitive about 
it, but how are you going to really be sure that you're getting 
the truth? 

MR. EARLY: Well, if I have not received any 
factual information to make a decision once I've got the 
complete product from my investigation, then I bring the 
employee in, especially if the person is a minority employee, 
and probably I have some discussions with him, and probably talk 
with him — him or her — and go over my own personal 
experiences that I've had, that I've encountered in my 25 
years. 

SENATOR HUGHES: Thank you. 

SENATOR LEWIS: Senator Baca. 

SENATOR BACA: Thank you. 

Richard, you mentioned some of the educational 
institutions. Were there any other educational institutions 
that you happened to go to as well? 

MR. EARLY: Yes. I received an Associate of Arts 



19 

Degree at San Bernardino Valley Junior College. 

SENATOR BACA: I didn't hear that. 

MR. EARLY: I received a degree in liberal arts. 

SENATOR BACA: Thank you. 

What are you doing right now to reduce the 
problems that are escalating in reference to drugs in prisons? 

And then the second question is, is it increasing 
or decreasing? What are you doing, what can be done, and is it 
increasing or decreasing? 

MR. EARLY: I would like to think that we're 
winning the war. 

I think once we stop one method of them getting 
the drugs into the institutions, they develop another mode of 
trying to get the drugs inside. So, once we plug the hole in 
one method, we do some training of staff — this is what we've 
got; this is what we've found — then enhance their knowledge in 
trying to keep the drugs from getting inside, so that they will 
know that at one time, this was the mode or the method, and the 
drugs getting inside. That's a way that we need to focus a lot 
of attention on that method to try to deter it from coming in. 

SENATOR BACA: Do you feel that it is high in 
reference to the amount of drugs in prisons or not? 

MR. EARLY: I haven't seen any significant change 
in the last 10-15 years. I think it's about — personally, 
there's no data or statistics that I can support my feelings on 
that, but I don't think there's any change within the last 10-15 
years as far as the drugs getting inside. 

SENATOR BACA: So the community and others feel 



20 

it's high; so therefore, it hasn't changed? 

MR. EARLY: Repeat you question, Senator. 

SENATOR BACA: So, apparently the community has a 
perception that's of a high use of drugs or smuggling the drugs 
in prison. So if it hasn't changed and it's still high, is that 
in the perception of the public or not? 

MR. EARLY: I would like to think we're winning 
the war, and there has been a significant decrease, but I don't 
have any data to support that. 

SENATOR BACA: A couple of other questions. In 
reference to the ethnicity, what is the ethnicity break down of 
the prison where you're at right now? 

MR. EARLY: My institution, 48 percent of my 
staff are Caucasian, 33 percent Hispanic, and 13 percent Black, 
and the rest are others. 

SENATOR BACA: Thank you. 

SENATOR KNIGHT: I have a question. 

SENATOR LEWIS: Senator Knight. 

SENATOR KNIGHT: It indicates that you've got 
about 8 percent of the inmates in academic programs, and 12 
percent in vocational programs. That's about 20 percent of the 
total. 

That seems like a small number. Is that 
standard, or is there a reason we can't get more into rehab 
programs? 

MR. EARLY: Well, the primary mission of my 
institution is reception center processing. One-fourth of my 
prison houses general population inmates, so I will not have the 



21 

academic programs that the other institutions would offer due to 
the fact that — due to the small number of general population 
inmates that are housed at my institution. 

SENATOR KNIGHT: So, that 20 percent is almost 
the 25 percent that would be eligible. 

MR. EARLY: That's correct. 

SENATOR LEWIS: Senator Burton. 

CHAIRMAN BURTON: Just to follow-up on Senator 
Baca. 

I guess you consider on drugs coming into prison, 
they come in by what, employees and visitors, I guess? How do 
drugs get into prison? 

MR. EARLY: A majority of the drugs get into 
prison via the visitors bringing the drugs in during our visits. 

CHAIRMAN BURTON: And then the rest are brought 
in by employees? 

MR. EARLY: Since I've been at my institution, I 
have not received any information of employees bringing drugs 
inside my facility. 

CHAIRMAN BURTON: What do you think? If there's 
a majority, there's got to be a minority. 

I'm not trying to get you to accuse anybody, but 
we have this concern about drugs in prisons. 

MR. EARLY: I'm not saying it's not happening. 

CHAIRMAN BURTON: You're not aware? 

MR. EARLY: That's correct. 

CHAIRMAN BURTON: In your prison, do you have any 
concern of what kind of programs you have that might prevent 



22 

recidivism, so maybe when they get out, you don't see them 
again? 

MR. EARLY: Currently, I'm thinking about 
expanding my pre-release program. Currently, 90 days prior to 
the for inmate's paroling, he's eligible to enroll into our 
pre-release program. It's currently a three-week program, and 
we're doing some brainstorming in an attempt to expand it to six 
weeks. 

CHAIRMAN BURTON: Is that kind of an expensive 
item or what? 

MR. EARLY: No, because most of the individuals 
that come in are the presenters, are generally the public, so 
it's just a matter of us — 

CHAIRMAN BURTON: I would think that that could 
help. I don't know if six weeks gets your ready, but it's sure 
better than three. 

How about educational programs in the 
institution? 

MR. EARLY: What programs are available at my 
institution? I have adult basic education I, II, III. I offer 
high school GED and computer lab. 

CHAIRMAN BURTON: What's the waiting list? 

MR. EARLY: For my academic program it's roughly 



2 00 inmates. 



CHAIRMAN BURTON: That are waiting to get in? 
MR. EARLY: That's correct. 

CHAIRMAN BURTON: How about for like basic — 
MR. EARLY: But those inmates that are waiting to 



23 

get in are also assigned — are on — plugged in other 
assignments awaiting availability. 

CHAIRMAN BURTON: Like what? 

MR. EARLY: Culinary. 

CHAIRMAN BURTON: I mean, I guess if it's a 
vocational thing, teaching somebody a job that might be useful 
on the outside. 

Why is there such a waiting list? Are you short 
staffed on that, or that's an expensive item, or what? 

MR. EARLY: Well, we're trying to get three more 
additional teachers in there. We're thinking about expanding 
our educational program going into third watch. 

Currently, the program is being offered on second 
watch, from roughly seven to three-thirty, and we're thinking 
about expanding, going to third watch. 

CHAIRMAN BURTON: So, you've asked the Department 
for three more teachers. 

MR. EARLY: That's correct. We are working on 
putting together a proposal. 

CHAIRMAN BURTON: You put together, just you or 
any other warden, a budget like for their institution, and they 
forward that on to the Department, who then looks at that, and 
they forward it somewhere else, and then it goes into the 
Department of Finance? 

MR. EARLY: That's correct. 

CHAIRMAN BURTON: How hard do you either push for 
it with the Department, or does it matter whether you push or 
not for something? You need three teachers to do something. 



24 

If you go in and really say, "This is really 
important for everything, including public safety," they may be 
more likely to do it? 

MR. EARLY: A lot has to do with the money 
availability. 

CHAIRMAN BURTON: It's been my experience, being 
around here, that the Department of Corrections is never short 
on dough. 

I'm not trying to put you on the spot. My 
brother spent 20 years teaching at San Quentin, so I understand 
the situation. 

It would just seem to me that unless someone was 
either in under the death penalty or LWOP, that we ought to have 
programs in prison so that when they come out, that they don't 
go back in. That they figured something out. 

A lot of the people that I know involved in this, 
the only thing they learned, especially newer criminals, is how 
to be, quote, tougher criminals, by the cons who were in there, 
because there's nothing coming down from our side. 

Pleasure of the Committee. 

SENATOR HUGHES: Move it. 

CHAIRMAN BURTON: Senator Baca. 

Then, before we vote, I believe you have family 
here you might want to introduce. 

MR. EARLY: Yes, I would like to introduce my 
significant other, Robin Burress. 

SENATOR BACA: Just as a follow-up to a question 
that the President Pro Tern, John Burton, asked in reference to 



25 

the educational level. 

Do you believe that there is a high number that 
are on the waiting list to get in because of also the 
requirements of the state stating that they must have the 
equivalent of at least a ninth grade level to get out, so that's 
added to the numbers that are there? And yet, we're not 
providing, I guess, in one sense, an expansion in order to meet 
those requirements of individuals that maybe eligible for 
probation or otherwise? 

MR. EARLY: That's correct. The average reading 
level at my institution is 6.9. 

SENATOR BACA: And yet, we've required that they 
have ninth grade at least before they are released. 

MR. EARLY: That's correct. 

CHAIRMAN BURTON: We have a policy that says you 
have to be able to have a ninth grade reading to get out, and we 
don't provide them the ability to get a ninth grade reading? 
Seems kind of stupid to me. 

In other words, it just seems stupid. It's like 
telling you, you've got to be able to do something in order to 
accomplish something, but we make it impossible for you to do 
it; therefore, you're never going to accomplish it. 

I know it's not your fault. That's stupid. 
Whose policy is that? Whose policy is it that says people can't 
get out unless they obtain something? 

As I recall, the opportunity had to be 
available. If it isn't, we ought to change that one. If it's 
stupid, we're probably looking at ourselves, but it just seems 



26 

to be totally unfair, telling somebody they have to accomplish 
something, and you have a minimum of 2 00 people waiting to do 
it. They can't get in, but you haven't got — nobody's given 
you the people to open up the classrooms. 

SENATOR BACA: Something we should look at. 

CHAIRMAN BURTON: Absolutely. Put it in a 
trailer bill. 

Moved by Senator Hughes. Call the roll. 

Would those in support please give your name and 
your organization. 

MS. AGUILERA-MARRERO: Good morning, Mr. Chairman 
and Members of the distinguished Committee. 

This is my first time here, and my name is 
Suzanna Aguilera-Marrero. And I am the President of the Chicano 
Correctional Workers Association, and I am representing the 2200 
members and our membership. 

And it is an honor and a privilege to come before 
you in support of Mr. Richard Early's candidacy for Warden. It 
is with great pleasure that I stand before you on behalf of the 
North Kern State Prison Chapter, the Central Region, and the 
State Board of Directors, and affirm our confidence in his 
accomplished administrative abilities. . We strongly believe in 
his effective, positive and work rapport, and know he can do the 
job. 

We ask that you also endorse and support the 
appointment. Thank you. 

CHAIRMAN BURTON: Thank you very much. Any 
others? 



27 

• 

MR. SEARCY: Good morning again, gentlemen and 
ladies, Mr. Chairman. I am Frank Searcy. I'm immediate past 
President of the Chicano Correctional Workers Association. 

It gives me great pleasure to be able to also 
offer our support for Mr. Early. What's significant also, I 
don't think has been mentioned today, is that Mr. Early, a while 
back, a couple of years ago, was working and was assigned to the 
Chuckawalla Valley State Prison. Due to some trying times that 
the administration was experiencing at the time, Mr. Early was 
able to take over the reins of the institution and act as 
Warden. And he did this for many, many months, and 
overwhelmingly has proven the abilities that they had in 
administering that institution. 

Again, also, I think what is very significant, he 
has wide, wide experience in other institutions, with Youth 
Authority, and similar situations as that. 

I'd like to also offer that when years ago I 
happened to have the great pleasure of working for Mr. Early, he 
was my supervisor at a particular institution. And at times 
when it was necessary to come to him with a situation, a 
question, a problem, as my supervisor, I would ask him for a 
response. And I saw the same thing happening today, that when 
he would answer his questions, he would take his time and come 
up with a response. In those instances when I would ask him for 
a response, it would be also, he'd take his time, he'd think the 
question out, the situation, and then he would give me a 
response. 

Fortunately, I am very happy to say that all of 



28 

those responses were very positive. 

Also, he also helped roe in providing my 
supervision and my subordinates. So again, thank you very much. 

CHAIRMAN BURTON: Moved by Senator Hughes. Call 
the roll. 

SECRETARY WEBB: Senator Baca. 

SENATOR BACA: Aye. 

SECRETARY WEBB: Baca Aye. Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 
Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Four to zero. 

CHAIRMAN BURTON: Congratulations. 

MR. EARLY: Thank you. 

CHAIRMAN BURTON: Cheryl K. Pliler. 

MS. PLILER: Good morning, Senators, ladies and 
gentlemen. 

My name is Cheryl Pliler. I'm currently assigned 
as the Warden at California State Prison, Sacramento, also known 
as New Folsom. 

I began my career with the Department of 
Corrections in 1968. Since that time, I've worked in a variety 
of capacities with both the Department of Corrections and the 
State Parole Board, the Board of Prison Terms. 

In all of my roles in the Department, I've worked 



29 

at approximately ten institutions. And as a Deputy Commissioner 
for the Parole Board, I've had an opportunity to see 
incarcerated felons from their sentencing, through their 
incarceration, through their parole, and in one assignment, 
through clemency and occasionally pardons. 

I have been assigned — 

CHAIRMAN BURTON: You could not have been there 
long enough to see a pardon. 

MS. PLILER: Sir, I have. I've actually 
conducted the investigation. 

I have been a warden for approximately four 
years. I was assigned as the Warden of California Correctional 
Center in July of 1995, was reassigned to California State 
Prison, Sacramento, in July of 1998, and that is my current 
assignment. 

CHAIRMAN BURTON: Before we get started, do you 
have family that you'd like to introduce? 

MS. PLILER: Only my Corrections family today. 

CHAIRMAN BURTON: We'll leave them out. 

Senator Hughes. 

SENATOR HUGHES: Could you tell me, since you've 
been on the job, have you had any complaints lodged at your 
facility of one staff member against another? 

MS. PLILER: Yes, ma'am. 

SENATOR HUGHES: How many of these, and how have 
you handled them? 

MS. PLILER: In my current assignment at New 
Folsom, I have not. In my former assignment at the California 



30 

Correctional Center there were two complaints of line-level 
uniformed staff and counselors who had complained of a 
supervisory staff member retaliating against them for failure on 
the line employee's part to succumb to advances. 

SENATOR HUGHES: Really. 

MS. PLILER: Yes, ma'am. 

SENATOR HUGHES: Is this male or female? 

I have to ask this because I don't really know. 
Stop laughing, Mr. Knight. I really want to know. 

MS. PLILER: Actually, it was one of each. 

SENATOR HUGHES: One of each. 

MS. PLILER: A female supervisor, male line 
staff; and female line staff person and a male supervisor. 

Investigations were conducted. The employees 
were found responsible, the supervisory employees were found 
responsible, and in one case I moved to terminate. In another 
case, we moved to demote. 

SENATOR HUGHES: What about male correctional 
officers supervising female prisoners? Has that been a major 
problem? 

MS. PLILER: I've never been assigned to a 
women's institution. I have been on a six-week special 
assignment at the California Institution for Women. And while I 
was at Avenal, one of our complexes was temporarily a female 
facility. 

It's a very difficult assignment. We asked when 
Avenal — Avenal originally was activated as an all male 
institution, we asked all of the staff for volunteers, for those 



31 

employees who wished to work with the female population. Those 
employees, for the most part in my career, employees of the 
Department of Corrections are very dedicated professionals. 
They try to do the right thing. 

Some of the male employees did not wish to work 
with the female population. There is inherent danger in that. 
Those who did, did a fine job. 

SENATOR HUGHES: What about the recidivism 
problem in your experience? What do you think is the major 
cause of a lot of residivism? 

MS. PLILER: I think probably that the recidivism 
rates is probably no different than it has been for many years. 

I believe that what appears to make it look 
greater was the enactment of the determinate sentencing law. 
What that caused is a quicker recycling, because the prisoners 
were no longer under the auspices of the State Parole Board. 
They weren't required to have minimum education. They weren't 
required to maintain a certain level of contact. They were 
sentenced to determinate term by the courts, and they paroled 
recycled faster. 

And I saw it on that end when I was a deputy 
commissioner, and I was revoking paroles and returning 
individuals back to prison. 

What I have seen in my career is, of course, as 
the felons become older, they become more burned out — burn-out 
is the expression. They get tired of playing the game; they get 
tired of doing the drugs; they get tired of the gang mentality 
and being involved in that culture. 



32 

The younger inmates, more involved with the drug 
culture, are more prone to go back to that culture when they 
parole, and it's kinds of a self-fulfilling prophecy. 

SENATOR HUGHES: Thank you. 

SENATOR LEWIS: Senator Burton. 

CHAIRMAN BURTON: To follow up, so the 
percentages are the same, roughly, but because there's more 
people, then there's more numbers. 

MS. PLILER: That's my feeling, sir, yes. 

CHAIRMAN BURTON: You said something about under 
the indeterminate sentence, a lot of them don't have to involve 
themselves in inmate education. 

MS. PLILER: That's correct. 

CHAIRMAN BURTON: Every bit of information we've 
gotten is that there aren't enough inmate education slots to fit 
the people that want to get in them anyway. 

MS. PLILER: There are waiting lists statewide, 
Senator. But there is no requirement. 

CHAIRMAN BURTON: But if you're required to do 
something that the state doesn't let you do because you can't 
get in the room, what kind of requirement would that be? A very 
unfair requirement. 

MS. PLILER: That's what I'm saying, Senator. 
There is no requirement. 

CHAIRMAN BURTON: But if you've got waiting lists 
now when it's not required, see how unfair it would be? In 
other words, I think it should be required, but I think they 
should have the ability, there should be somebody there to teach 



33 

them. 

In other words, you have waiting lists on a 
voluntary basis. If it was required, God knows when it would 
be. Then, depending on who the person is, you'd wonder if 
they'd shank the guy ahead of them on the waiting list in order 
to get in to get out. 

It's not in your field, but what is the cost of 
hiring a teacher there? 

MS. PLILER: Depending on whether it's an 
academic instructor or a vocational instructor, it's about 
$35,000 a year. 

CHAIRMAN BURTON: That's cheaper than the price 
of a correctional guard; right? 

MS. PLILER: Oh, yes. 

CHAIRMAN BURTON: Let's see, if we let Novey 
organize the teachers — 

[ Laughter . ] 

MS. PLILER: I'm sure Mr. Novey would be glad to 
do that for you. 

CHAIRMAN BURTON: It would seem that would really 
be a pretty good investment. Because I looked at the list that 
Corrections used to put out, and it was a sheet about this big, 
and it had breakdowns by age, by race, blah, blah, blah, by 
crime and by education. It was amazing when, if you had college 
graduates, the only violent crimes were probably domestic 
crimes, you know, husband shooting wife, or 
boyfriend-girlfriend . 

When you got down to community college, it still 



34 

wasn't much, maybe a bar fight. 

Then when you got down to 6th grade, 7th grade, 
8th grade, that's when you got the real violent crimes. There 
were very few PhDs that actually got involved in drive-by 
shootings and muggings, and things like that. 

I would think if one of the best ways to maybe 
stop people from coming back, beside the old age deal, is 
education, ability when they get out, to maybe find a way to 
make if not a decent, certainly an honest living. 

I know that Presley, when he was here, was very 
big on education, and others were not. 

Let me ask you, since you talked about burn-out, 
when they get old. And probably you can't comment on this 
because this will get you in trouble with the Governor. 

But it would seem to me that at least prisoners 
over the age of 70, if they were put out in some kind of either 
local corrections or electronic monitoring, or who knows what, 
it would probably save the state a lot of money and not really 
be that big a threat, because they just say as they get older, 
you know, that the profiles of violent crime are not bunch of 
geriatric people. They're more probably 20s, 30s, maybe 40s 
tops. I think once they get into their 50s, unless they're 
unique, they lose that. 

Can you comment on that? We can confirm you 
quick, and he can't take the job away. 

[ Laughter . ] 

MS. PLILER: Certainly there is no statutory 
provision to allow for that. However, that would be an 



35 

additional alternative to incarceration. 

CHAIRMAN BURTON: At a certain age level, with 
your history in the whole, from the time they come in until 
someone even gets pardoned, it would seem to me that's something 
that ought to be looked at. I don't know exactly by whom, but I 
just can't imagine 65 and 70 year old people being — unless 
they're like con men, or something, but being much of a threat 
to anybody, and definitely not in prison a threat. 

SENATOR LEWIS: With regard to the waiting list 
you have for academic programs, the information we had, there 
was a waiting list of 168 inmates when we received the 
information. 

How long would that make equate to in terms of 



waiting? 



Senator. 



MS. PLILER: Let me give you two answers to that, 



At my previous institution, it was a different 
type of clientele. We would parole like 300 a month. And the 
waiting list was actually quite short, and it was probably three 
to four months to get into a class. 

At my current institution, which is a Level IV, 
180 design, houses some very violent offenders doing very, very 
long-term sentences — a lot of life-without-parole, and a lot 
of lifers as well — it could take upwards of a year to get into 
a program because there is not that turnover. 

SENATOR LEWIS: Thank you. 

Senator Baca. 

SENATOR BACA: Couple of questions to follow-up 



36 

on what the President Pro Tern asked in reference to the 
educational level. 

Are you aware that there is a requirement to be 
paroled out that you must obtain a least a 9th grade level to be 
paroled? 

MS. PLILER: No, sir, I am not. 

SENATOR BACA: There is legislation that was 
passed that requires for an individual to be paroled, they must 
have at least a 9th grade level of education. 

MS. PLILER: Contrary to their court sentencing? 

SENATOR BACA: I don't know about that, but just 
to be released from prison, anybody who is serving right now who 
has not got a GED or a high school diploma, before he or she can 
be released, must have the equivalent of at least a 9th grade 
level of education. 

It was legislation, I believe, that went through 
last year. At least that's what I've been informed. Maybe 
that's one of the reasons why there's a waiting list. 

What is the criteria, then, for individuals to 
get into an educational program, whether it be especially for 
high school, GED, or the equivalent? Is there a criteria? 

MS. PLILER: They need to want to. In some 
locations, depending on the type of institution, it could be a 
requirement: their first 12 months in the institution, they 
must participate in an education program if they don't have 
their GED or high school diploma. 

For vocational programs, they are required to 
have in some programs an 8th grade reading level, in some 



37 

■ 

programs a 9th grade reading level. 

So, those are the minimum requirements. 

SENATOR BACA: But no criteria based on an 
individual that may be up for parole, or something like this, 
who may be getting out, that we want to make sure that if we 
deal with the return rate, to make sure that at least they have 
the educational level before they get into society. There is 
none that they would have precedence over someone else that 
maybe on waiting list, that is not going to get out, that is a 
life-time sentence, versus someone that is not. 

There is no criteria? 

MS. PLILER: Not at this point, Senator, no. 

SENATOR BACA: It's maybe something that we 
should look at, because those are the individuals that are 
coming into our society that should have the educational level 
to make sure they don't come back. That's something that maybe 
we ' ve got to look at . 

What are you doing to reduce the drug problems 
that we have the prisons? Apparently there is still a high 
number of drugs in prisons. Is it decreasing or increasing? 

MS. PLILER: Senator, I'd like to think we're 
ahead of the curve, but sometimes I wonder. 

Drugs come into the institution in a number of 
different ways. We use various surveillance techniques, both 
telephone and video in the visiting rooms, and as well as in the 
communities. 

We have informants who provide us information 
that drugs are being brought into the institution. We intercept 



38 

correspondence, both incoming and outgoing. 

And unfortunately, periodically we will have a 
staff person who is involved, and that person is swiftly 
terminated. 

SENATOR BACA: Couple of other questions that I 
have. 

I visited Folsom. I took a trip down with other 
Legislators last year. You were not there. 

What are you doing to address overcrowding now at 
the institution? 

I went there, and I saw bunkbeds, military-like 
style. I know that is a problem. 

MS. PLILER: New Folsom is at design capacity, 
which is a single cell, is at about 1596 Level IV inmates. 
Currently there are about 2900 inmates. It's come down about 
4 00 inmates in the last several months because our population is 
changing significantly, and we will, because of our Psychiatric 
Services Unit, which will come up at end of June, we are going 
to have some single cell status. 

One of our gyms is activated for minimum level 
inmates. We do have 100 inmates housed in one of our gyms. 

Overcrowding is a significant problem. 
Currently, with our single cell policy, if we have a predatory 
inmate or a victim type of inmate, they are single celled. They 
are not double celled, nor are they forced to be double celled. 
It puts a tremendous strain on the living conditions in the 
institution. 

Responsible estimates would venture to say that 



39 

by 2002, we will be out of beds. 

SENATOR BACA: Does overcrowding also create a 
lot of the problems that may arise in prisons because of riots 
or otherwise, or inmates, or people getting a little hostile? 

MS. PLILER: It certainly contributes to it. 
It's a very unnatural environment to begin with, and especially 
when you get into situations where men are housed in gymnasiums, 
100, 200, 300 men to a gym. They get on each other's nerves. 
There's no sense of being alone. 

At least with a cell, they have their own cell. 
They may have a roommate, but they have their own cell. 

SENATOR BACA: Should any policies be changed to 
reduce overcrowding right now? 

MS. PLILER: Senator, with the intake that we 
have at this point, and the Department certainly has no control 
over the court systems in terms of sentencing, the problem will 
continue to escalate until we have more beds or until other 
alternatives to incarceration are seriously considered, 
including parole violators. 

SENATOR BACA: One final question. What is the 
ethnicity or the diversity break down of the staff at your 
institution? 

MS. PLILER: Currently at New Folsom, there's 64 
percent Caucasian, and the balance are people of color, 
employees of color, so about 3 6 percent. That breaks out about 
17 percent Black, and I believe 14 percent Hispanic. American 
Indians, Pacific Islanders are the balance. 

SENATOR BACA: So, there's a low number of 



40 

Hispanics that are there at that institution right now that are 
employed or in executive managerial positions; is that correct? 
Based on the numbers that you gave me, there seems to be a 64 
percent, 16 percent African-American, and a 14 percent or less 
Hispanic; right? 

MS. PLILER: It's a little breakdown for managers 
and supervisory. There are — percentage in that breakdown was 
54 percent Caucasian, and the balance people of color, and 20 
percent Hispanic, and 13 percent Black in the 
management-supervisory ranks. And that's a matter of 
recruitment. 

SENATOR BACA: I'd hope you'd look at, and I'd 
like to see, hopefully, the areas of improvement, especially 
diversity for upwards mobility in that area, and especially 
people of color. And, of course, qualified individuals. 

I hope that you look towards increasing those 
numbers in the future as we confirm your appointment. 

MS. PLILER: Thank you. 

SENATOR LEWIS: Senator Knight. 

SENATOR KNIGHT: Thank you, Mr. Chairman. 

It seems as though our Chairman is coming up with 
a new profession, the senior citizen hit man. 

You know, you indicated that the inmates mellow 
as they get older, and we certainly do. 

[ Laughter . ] 

SENATOR KNIGHT: Is it the seniors who are 
contributing to the frivolous lawsuits, or is there no 
correlation to frivolous lawsuits and age of inmate? 



41 



correlation. 



MS. PLILER: Sir, I've seen no 

SENATOR BACA: Move the nomination. 

SENATOR LEWIS: We have a motion from Senator 



Baca. 



Do you have anyone with you here today that you'd 
care to introduce? 

MS. PLILER: No, Senator. Thank you. 

SENATOR LEWIS: Let's hear from anyone in the 
audience who wishes to testify in favor of the nomination. 

MR. SEARCY: Thank you very much again, ladies 
and gentlemen. I'm Frank R. Searcy, and I'm here to personally 
support Ms. Plier for her position as Warden at New Folsom. 

Her career experience is overwhelming and speaks 
for itself. 

I think I should be very brief, but one thing I'd 
like to point out to the Committee, that as we were listening to 
her responses, at times it would even take a little bit of 
effort to really be able to hear that. 

But what I detected was that the questions that 
were put to her, she somehow was also able then to — everyone 
would ask the question in the same tone that she put out. So, 
if she's able to do this here, it's obvious that she can do that 
with her staff, with her inmates at her institution, which is 
going to be very, very beneficial to her at Warden there. 

And we thank you for your votes for confirmation. 
Thank you. 

SENATOR LEWIS: Thank you. 



42 

Next. 

MS. AGUILERA-MARRERO: Thank you. 

I'm Suzanna Aguilera-Marrero on behalf of the 
Chicano Correctional Workers Association, 2200 strong. 

It's an honor to be here before you again in 
support of Ms. Cheryl Pliler. Her Chapter, Level CCWA, very 
much is in support of her, is in total confidence of her 
abilities to be an administrator and fully support her, as does 
the region of the North, and the State Board of Directors. 

Thank you. 

SENATOR LEWIS: Thank you very much. Anyone 



else? 



nomination? 



Anyone wanting to testify in opposition to the 

We already have a motion by Senator Baca. 

Please call the roll. 

SECRETARY WEBB: Senator Baca. 

SENATOR BACA: Aye. 

SECRETARY WEBB: Baca Aye. Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 



Four to zero. 



SENATOR LEWIS: It's currently four to nothing. 
We will put that on call as well for Senator Burton. 



43 



Congratulations . 

MS. PLILER: Thank you. 

[Thereafter, CHAIRMAN BURTON 

added his Aye vote, making 

the final vote 5-0 for 

confirmation. ] 
[Thereupon this portion of the 
Senate Rules Committee hearing was 
terminated at approximately 10:18 A.M.] 
— ooOoo — 



44 
CERTIFICATE OF SHORTHAND REPORTER 

I, EVELYN J. MIZAK, a Shorthand Reporter of the State 
of California, do hereby certify: 

That I am a disinterested person herein; that the 
foregoing transcript of the Senate Rules Committee hearing was 
reported verbatim in shorthand by me, Evelyn J. Mizak, and 
thereafter transcribed into typewriting. 

I further certify that I am not of counsel or 
attorney for any of the parties to said hearing, nor in any way 
interested in the outcome of said hearing. 

, IN WITNESS WHEREOF, I have hereunto set my hand this 
C* < day of "T^^V^ , 1999. 





:zak 
Shorthand Reporter 



374-R 

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PUBLIC LIBRARY 



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WEDNESDAY, MARCH 24, 1999 
10:36 A.M. 



369-R 



SENATE RULES COMMITTEE 
STATE OF CALIFORNIA 



HEARING 



STATE CAPITOL 

ROOM 113 

SACRAMENTO, CALIFORNIA 



WEDNESDAY, MARCH 24, 1999 
10:36 A.M. 



Reported by: 



Evelyn J. Mizak 
Shorthand Reporter 



11 



APPEARANCES 

MEMBERS PRESENT 

SENATOR JOHN BURTON, Chair 

SENATOR JOHN LEWIS, Vice Chair 

SENATOR JOE BACA 

SENATOR TERESA HUGHES 

SENATOR WILLIAM KNIGHT 

STAFF PRESENT 

GREG SCHMIDT, Executive Officer 

PAT WEBB, Committee Secretary 

NETTIE SABELHAUS, Consultant on Governor's Appointments 

WADE TEASDALE, Consultant to SENATOR LEWIS 

FELICE TANENBAUM, Consultant to SENATOR HUGHES 

ANDY PUGNO, Consultant to SENATOR KNIGHT 

MANNY HERNANDEZ, Consultant to SENATOR BACA 

ALSO PRESENT 

JAMES THEODORE HUNT, Member 

Alcoholic Beverage Control Appeals Board 

TIM YARYAN 

Los Angeles Police Protective League 

Los Angeles Deputy Sheriffs 

Los Angeles Probation Union 

AARON READ 

Peace Officers Research Association of California, PORAC 

Highway Patrol Association 

WILLIAM HEMBY 

California Organization of Police and Sheriffs 

DEL HAWES, CEO 

Alcoholic Beverage Control Appeals Board 



HI 



JOSE E. MEDINA, Director 
Department of Transportation 

SENATOR RICHARD POLANCO 

SENATOR DON PERATA 

RON GONZALES, Mayor 
City of San Jose 

GRISELDA BARAJAS, Vice President 

Business Advocacy 

Sacramento Hispanic Chamber of Commerce 

JOHN RUE DA 

California Hispanic Chambers of Commerce 

PAUL COHEN 

Northern California Carpenters 

ROLANDO ARANGO, President 

California Hispanic Professional Association 

MASSEY VILLAREAL, Chairman of the Board 
United States Hispanic Chamber of Commerce 

DAVE ACKERMAN 

California Chamber of Commerce 

Associated General Contractors 

LES SPAHN 

National Railroad Passenger Corporation (Amtrack) 

D. J. SMITH 
Transportation California 

JIM HARD, Civil Service Division Director 

California State Employees Association, SEIU Local 1000 

IRENE GUTIERREZ -GARZA 

CAFE, Southern California Region 

TIM CREMINS 

Operating Engineers, AFL-CIO 

MARSHALL DIAZ 
CAFE de California 
Projecto del Barrio 



IV 



SAM ORTEGA, Vice President 

California Mexican American Veterans Memorial 

JOHN LIRA, Member 

San Francisco Telecommunications Commission 

ROBERT PERNELL 

California State Council of Laborers 

CARLOS AQUINO 

Ambiente de Latino Democratic Club, San Francisco 

PAULA FISCAL, Member 

San Francisco Alcoholism Advisory Board 

Curtin Pacific Institute for Criminal Justice 

EDMUNDO LOPEZ 

Hispanic Contractors Association 

Mexican-American Business and Professionals, San Diego 

WILLIAM HEMBY 

California Organization of Police and Sheriffs 

FLOYD CHAVEZ 

Northern California Latin Business Association 

PAUL GUERRERO 

California Small Business Alliance 

DIANA LaCOME 

National Concilio of America 

DeAnn BAKER 

California State Association of Counties 

NATASHA FOOMAN 

League of California Cities 

ROBERT McKAY, President 

American Indians State Employees of California 

CRAIG COPELAN, President-elect 

Professional Engineers in California Government 

BILL GARCIA, Legislative Chairman 
American GI Forum, California 

BEN SHAWNEEGO, President 
National Indian Contractors 



JOHN MOLINA 

Labor Council for Latin American Advancement 

JOHN LEMMENS 
CAFE, California 

FRANK RAMIREZ, National Advisor 
American GI Forum 

ROBERTO VELLANOWETH 
LULAC 

RAUL ORTEGA, Commander 

American GI Forum/ Modesto Chapter 

ZELDA SAMANSUETTI/ President 
American-Mexican War Mothers Organization 

DON A. DRUMHELLER/ Past Department Commander 
American Legion 

JULIAN CAMACHO 

Northern California Association of 8A 

MEL ASSAGAI 

California Trucking Association 

ROBERT JACOBVITZ 

American Institute of Architects/ San Francisco 

STEVEN J. YBARRA 

CDP Chicano Latino Caucus 

MARIA LUISA VILLA 

Comite Mexicano Civico Patriotico 

DAVE ALDAPE 

Mission Council on Alcoholic Abuse by the Spanish Speaking 

LT. AL CASCIATO/ former President 

San Francisco Police Officers Association 



VI 

INDEX 

Page ? 
Proceedings 1 

Governor's Appointees: 

JAMES THEODORE "TED" HUNT, Member 

Alcoholic Beverage Control Appeals Board 1 

Background and Experience 1 

Questions by SENATOR LEWIS re: 

Great Increase in Number of 

Appeals Filed 2 

Questions by SENATOR BACA re: 

Adequacy of Current Laws to 

Discourage Illegal Access to Liquor 

By Minors 3 

Questions by CHAIRMAN BURTON re: 

One Protect Can Trigger Appeals 

Hearing 3 

Motion to Confirm 3 

Witnesses in Support: 

TIM YARYAN 

Los Angeles Police Protective League 

Los Angeles Deputy Sheriffs 

Los Angeles Probation Union 4 

AARON READ 

Peace Officers Research Association 

Of California 
Highway Patrol Association 4 

WILLIAM HEMBY 

California Organization of Police 

And Sheriffs 5 



vu 



DEL HAWS, CEO 

Alcoholic Beverage Control Appeals Board 5 

Questions by CHAIRMAN BURTON re: 

One Protest May Trigger Hearing 5 

Committee Action 6 

JOSE E. MEDINA, Director 

Department of Transportation 6 

Introduction and Support by 

SENATOR RICHARD POLANCO 7 

Background and Experience 8 

Statement of Support by 

SENATOR DON PERATA 14 

Questions by SENATOR LEWIS re: 

Lack of Experience in Transportation 17 

Study of Other State and Municipal 
Transportation Systems 18 

Boston' s Transit System 19 

Size of Optimal Reserve 19 

Staffing Up 20 

Contracting Out 21 

More Money Spent on Mass Transit than on 

Local Streets and Road 21 

Demand for Mass Transit in State 22 

High Speed Rail Project 23 

Questions by SENATOR KNIGHT re: 

Problems with Highways in Antelope 

Valley 24 



Vlll 

HOV Lanes that Go Nowhere 26 

Projections of High Population 

Growth in High Desert Area 27 

Questions by SENATOR LEWIS re: 

Support for Study on Effectiveness 

Of HOV Lanes 28 

Questions by CHAIRMAN BURTON re: 

HOV Lanes Mandated by Federal 

Government 29 

Hourly Restrictions on Use of HOV Lanes 29 

Highway 101 Bottleneck outside of 

Novato 30 

Questions by SENATOR BACA re: 

Need for Increased Work Force 31 

Meeting Future Transportation Needs 

In the Inland Empire 32 

Need for Offramps on Both Sides of 

Freeways 33 

High Administrative Costs at Caltrans 33 

Questions by SENATOR HUGHES re: 

Need for Consistency in HOV Lanes 34 

Motion to Confirm 35 

Witnesses in Support: 

RON GONZALES, Mayor 

City of San Jose 35 

* 

GRISELDA BARAJAS, Vice President 

Business Advocacy 

Sacramento Hispanic Chamber of Commerce 36 



IX 



JOHN RUE DA 

California Hispanic Chambers of Commerce 36 

PAUL COHEN 

Northern California Carpenters 37 

ROLANDO ARANGO, President 

California Hispanic Professionals Association 37 

MASSEY VILLAREAL, Chairman of the Board 

United States Hispanic Chamber of Commerce 37 

DAVE ACKERMAN 

California Chamber of Commerce 

Associated General Contractors 38 

LES SPAHN 

National Railroad Passenger Corporation (Amtrak) 38 

D. J. SMITH 

Transportation California 38 

JIM HARD, Civil Service Division Director 

California State Employees Association 

SEIU Local 1000 39 

IRENE GUTIERREZ -GARZA 

Southern California Region of CAFE 39 

TIM CREMINS 

Operation Engineers 39 

MARSHALL DIAZ 

CAFE de California 39 

SAM ORTEGA, Vice President 

California Mexican-American Veterans Memorial 40 

JOHN LIRA 

Telecommunications Commission, San Francisco 40 

ROBERT PERNELL 

California State Council of Laborers 41 

CARLOS AQUINO 

Ambiente de Latino Democratic Club 41 



PAULA FISCAL, Commissioner 

City of San Francisco 

Alcoholism Advisory Board 41 

EDMUNDO LOPEZ 

Hispanic Contractors Association 

Mexican-American Business and Professionals, 

San Diego 41 

WILLIAM HEMBY 

California Organization of Police and Sheriffs 42 

FLOYD CHAVEZ 

Northern California Latin Business Association 42 

DIANA LaCOME 

National Concilio of America 42 

DEANN BAKER 

California State Association of Counties 42 

NATASHA FOOMAN 

League of California Cities 43 

ROBERT McKAY, President 

American Indian State Employees of California 43 

CRAIG COPELAN, President-elect 

Professional Engineers in California Government 43 

BILL GARCIA, Legislative Chairman 

American GI Forum 43 

BEN SHAWNEEGO, President 

National Indian Contractors 44 

JOHN MOLINA 

Labor Council for Latin American Advancement 44 

JOHN LEMMONS 

California CAFE 44 

FRANK RAMIREZ, National Advisor 

American GI Forum 44 



XI 



ROBERTO VELLANOWETH 

LULAC 45 

RAUL ORTEGA, Commander 

Modesto Chapter 

American GI Forum 45 

ZELDA SAMANSUETTI, President 
American-Mexican War Mothers Organization of 

California 45 

DON DRUMHELLER, Past Department Commander 

American Legion 45 

JULIAN CAMACHO 

Northern California 8A Association 46 

MEL AS SAG I 

California Trucking Association 46 

ROBERT JACOBVITZ, Executive Director 

American Institute of Architects 46 

STEVEN J. YBARRA 

Chicano Latino Caucus 4 6 

MARIA LUISA VILLA 

Comite Mexicano Civico Patriotico 4 6 

DAVE ALDAPE, Past Director 

Mission Coalition, San Francisco 47 

AL CASCIATO, former President 

San Francisco Police Officers Association 47 

Committee Action 4 8 

Termination of Proceedings 48 

Certificate of Reporter 49 



P-R-O-C-E-E-D-I-N-G-S 
— OOOoo — 

CHAIRMAN BURTON: Next order of business, J. 
Theodore Hunt, Member of Alcoholic Beverage Control Appeals 
Board appointment, Ted. 

MR. HUNT: My name is Ted Hunt. I want to thank 
you very much for giving me the opportunity to be here today. 

I'd like to tell you a few details about myself, 
about the Alcoholic Beverage Control Appeals Board, and explain 
the direction in which I intend to take the Board. 

My wife Mary and I have a blended family. I had 
four children and Mary had two when we got married, and we 
subsequently adopted a two-year-old child. 

I've been a Los Angeles police officer since 
1975. In 1995, I was elected to the Board of Directors of the 
Los Angeles Police Protective League, which is LAPD's 
rank-and-file police association. I'm currently assigned to the 
Protective League where I serve as a full-time union executive. 

In 1996, I was appointed by Governor Wilson to 
the Commission on Peace Officer Standards and Training, or 
POST. I was the only person of police officer rank nationwide 
to be invited by the United States Department of Justice to 
address the National Symposium on Police Integrity. 

I have a doctorate in public administration from 
the University of La Verne. 

The Department of Alcoholic Beverage Control and 
the separate Alcoholic Beverage Control Appeals Board, to which 
I've been appointed, were created in the same constitutional 



amendment. The Appeals Board is composed of three members. The 
Board's principle task is to hear and rule on decisions made by 
the Department. If a person's dissatisfied with the decision of 
the Department of Alcoholic Beverage Control, that person can 
appeal the Department's decision to the Appeals Board which acts 
as an appellant tribunal. 

I envision that the Appeal's Board will continue 
to render logical, just, and fair decisions which will protect 
the people of this state, which includes those who are licensed 
by ABC, and those who administer our laws. 

I'd be happy to answer any questions that you may 
have. 

CHAIRMAN BURTON? Senator Lewis. 

SENATOR LEWIS: Just one question. 

I understand in the last four years, the number 
of appeals has greatly multiplied. What's the principle cause 
for that? 

MR. HUNT: The appeals have greatly increased. 
And I can only speculate because I've only been there for 
approximately two months, but I do believe that in part it's a 
three-strikes bill, if you will, where if a licensee gets a 
strike, on the third strike they lose their license. And based 
on that, people are more inclined to appeal those rulings. 

What we have done to that extent is, the staff 
has done a stellar job of dealing with those issues, and we have 
some contingency plans in mind if it continues to rise. 

CHAIRMAN BURTON: Senator Baca. 

SENATOR BACA: Thank you, Senator. 



Ted, as a long-time member of law enforcement in 
the community of Los Angeles, what is your opinion about whether 
the laws and regulations controlling liquor licenses are 
adequately discouraging illegal access to liquor by those under 
the age of 21? 

MR. HUNT: That's perhaps one of the most serious 
problems that the Department has to deal with. And in our 
function as the Appeals Board, the only thing that we would do 
is to listen to the appeals by the licensees and to rule on 
those . 

SENATOR BACA: Thank you. 

CHAIRMAN BURTON: If a person's awarded a 
license, they apply for license; they do the posting. There's a 
protest. They have a hearing. The license is then granted. 

Does one letter then trigger the Appeals Board to 
hold a hearing? 

MR. HUNT: I believe, Senator, that if one person 
protests the license, then it goes to an administrative law 
judge. I may not have that completely accurate. And then based 
on that, a person can write a separate letter to appeal it to 
the Appeals Board. 

CHAIRMAN BURTON: Do you have to take every 
appeal? 

MR. HUNT: As I understand, yes, Senator, we take 
every appeal. 

CHAIRMAN BURTON: Is that by custom or by law; 
do you know? 

MR. HUNT: I believe that's Constitutional law. 



CHAIRMAN BURTON: It's in the Constitution that 
the ABC Appeals Board, one person protests a license, that they 
must be granted that hearing. 

MR. HUNT: The technical and legal answer, I 
don't have. I will get back to you on it. 

CHAIRMAN BURTON: We can check it out. 

Then, if a license is denied as a result of the 
administrative law judge hearing, then the applicant does have a 
right to appeal to you? 

MR. HUNT: Correct. 

CHAIRMAN BURTON: Pleasure of the Committee. 

SENATOR BACA: Move. 

CHAIRMAN BURTON: Moved by Senator Baca. Call 



the roll. 



introduce? 



Is your family present that you want to 



MR. HUNT: My family is at home. With the a 
two-year-old it's difficult to travel. But I do have some 
friends here. 

CHAIRMAN BURTON: Those who are in support, just 
come up and quickly give your names, your organization, and your 
support . 

MR. YARYAN: Tim Yaryan on behalf of the Los 
Angeles Police Protective League, the Los Angeles Deputy 
Sheriffs, Los Angeles Probation Union, in strong support of Mr. 
Hunt ' s conf irmat ion . 

MR. READ: Aaron Read, representing Peace 
Officers Research Association of California, PORAC, and the 



Highway Patrol Association. 

We are delighted to be here to support Ted Hunt, 
a great friend of ours and a great friend of California. 

MR. HEMBY: Bill Hemby, representing the 
California Organization of Police and Sheriffs. 

We're here to support Mr. Hunt. Thank you. 

MR. HAWS: If I can just add a comment. I'm the 
CEO of the Alcoholic Beverage Control Appeals Board. 

I have only worked with Mr. Hunt for approximately two, 
two-and-a-half months, but my assessment of this gentleman — 

CHAIRMAN BURTON: Your name, sir? 

MR. HAWS: Del Haws. 

My assessment of this gentleman is that he is 
well qualified. His heart is intended to bring fairness and 
justice to the system, and I look forward to working with this 
gentleman. 

CHAIRMAN BURTON: Do you have the answer to 
that? Is it a automatic, one person can appeal a license that 
was granted, and the Board has to hold a hearing on that? 

MR. HAWS: Yes, in a sense, in that any party may 
appeal a decision of the Department of ABC. 

CHAIRMAN BURTON: Right. 

MR. HAWS: And so, that is, one person or fifty. 
It doesn't matter. We have to accept that as an appeal if it's 
timely. 

CHAIRMAN BURTON: Then you hold the appeal 
hearing. 

MR. HAWS: That is correct. 



6 

CHAIRMAN BURTON: Thank you. 

Any opposition. 

Call the roll. 

SECRETARY WEBB: Senator Baca. 

SENATOR BACA: Aye. 

SECRETARY WEBB: Baca Aye. Senator Hughes. 
Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. 

CHAIRMAN BURTON: Hold the roll open for Senator 
Hughes . 

Congratulations. 

[SENATOR HUGHES later added 
her Aye vote to the record. ] 

CHAIRMAN BURTON: Next is the Director, 
Department of Transportation, Jose Medina. 

Senator Polanco. 

SENATOR POLANCO: Good morning, Mr. Chairman and 
Members . 

CHAIRMAN BURTON: If I could before you start, I 
just want to welcome my constituent and long time friend, Jose 
Medina, who I believe will bring a fresh new look to the 
Department of Transportation. 

There ' s been some criticism in the press that 



you're not an engineer, you haven't been that fully involved in 
some of the issues, which may be a blessing, because we've had a 
lot of engineers, we've had a lot of screwed up transportation 
problems, so who knows. 

[Applause. ] 

CHAIRMAN BURTON: Thank you. 

SENATOR POLANCO: Mr. Chairman and Members, I'm 
here today to lend my support and to ask the Committee to 
support this recommendation. 

Jose Medina is an attorney. He is a community 
leader. He's a role model. He has had experience as a labor 
organizer. He has had experience in the public domain both as 
an elected official and as a member to various boards and 
commissions. 

He is a graduate from Harvard Business School. 
He is an individual who is taking on one of the largest 
departments in our state administration: $8 billion budget; 
20,000 employees. And we believe that the appointment that was 
given, or the nomination that was provided to Mr. Medina will 
bring the type of talent, experience and the thinking outside 
the box that is important. 

What we have we had in the past, I believe, can 
be debated. The future is where we have the challenge. The 
proposal that Chairman Burton is moving with regards to 
expanding the infrastructure and addressing the infrastructure 
needs of transportation is critical. There is no other person, 
I think, today that is more deserving of this particular 
appointment than Jose Medina. 



8 

I'm here to ask for your consideration and 
support. He'll do an outstanding job. His record verifies his 
commitment to public service. 

With that, Mr. Chairman, thank you very much for 
the opportunity to present him to this very distinguished Rules 
Committee body. 

CHAIRMAN BURTON: Thank you. 

Jose. 

[Applause. ] 

CHAIRMAN BURTON: I think the applause you gave 
the Chairman with his comments will suffice for the rest of the 
day. 

In seriousness, we do not want any shows of 
opprobrium or approbation. Silence will serve us all well. 

MR. MEDINA: Thank you, Senator Burton, Members 
of the Senate Rules Committee. 

I first would like to thank the staff of the 
Senate Rules Committee for all of their assistance and advice in 
preparing for confirmation. 

And at this time I would like to introduce two 
members of my family. First, my wife, Raquel Medina, who's here 
in the front row. 

My sister Helen Picon. 

I do want to correct the record in that I am not 
an attorney. I did graduate from Hastings Law School. I did 
supervise attorneys and law clerks at a public interest law firm 
for over 14 years, but I have never purported to be an attorney. 

In regard to the Harvard Graduate School of 



Business, I applied and was accepted, took the entrance exams 
for the Harvard Graduate School of Business without ever having 
gone to undergraduate school. I did complete the two-year 
program. You had to maintain higher than a B average, which I 
did not at that time, but I did complete the two-year program. 

From that point, however, I went to San Francisco 
Community College, where I was Student Body President. I 
graduated from San Francisco State University with a BA in urban 
studies, and I earned my law degree at Hastings College of the 
Law. 

I do have a knowledge of transportation which is 
not reflected in my resume because I had not prepared a resume 
for the Department of Transportation. I have over 25 years of 
public service. I served two terms on the Board of Permit 
Appeals in San Francisco, where I've dealt with demolition and 
construction permits, and as such, I know how important the 
permitting process is, the need to streamline the permitting 
process so that we can get projects out in a more timely 
fashion. 

I also served under two mayors on the Police 
Commission. And as such, I'm very cognizant of the need for 
public safety. I was very involved with the Triple A School 
Guard Program, and I know how important it is to be able to 
assure pedestrian safety. 

As a member of the San Francisco Board of 
Supervisors, I sat on the Transportation Technology Committee, 
and we dealt with a number of transit and transportation related 
issues, all the way from the municipal railway, to BART, to the 



10 

San Francisco Airport. 

I also sat as member of the San Francisco Public 
Transit Authority, where we were responsible for traffic 
management, congestion, street repaving, and all of the issues 
that have to do with transportation planning. 

While a member of the San Francisco Board of 
Supervisors, I participated in the Peninsula League of Cities 
group. And again, we dealt with transportation issues affecting 
all of the counties and cities in the Peninsula. Of course, we 
discussed state highways, local streets and roads, the San 
Francisco and San Jose Airports, and many other transportation 
related issues. 

I represented the Peninsula League of Cities on 
the California League of Cities. State committees, I was Chair 
of the Housing Community Economic Development Committee, and of 
course, there we dealt with housing, land use, and 
transportation. Together, we addressed transportation and 
transit issues. We proposed solutions, and we sent these to the 
Legislators to enact as public policy. 

At the Annual State Convention, I was San 
Francisco's representative in consecutive years, and again cast 
the city's votes and participated in the policy discussions 
around statewide transportation issues. 

I was active with the National Association of 
County Officials. I was Vice Chair of the National Steering 
Committee on Economic Development, Community Development and 
Housing. Again, as a member of NACO, together we addressed 
transportation issues on a national basis. Together we went to 






11 

Congress and lobbied for TEA 21, and also at that time for 
ISTEA, and lobbied for regional transportation projects in the 
San Francisco area. 

While a member of the Board of Supervisors, I was 
very involved in the Red Light Running Program, in the setting 
up of cameras to prevent people from running red lights. Again, 
the street crossing, the crosswalk program. 

I'm very excited to have been asked by the 
Governor to direct Caltrans. I think that this is in keeping 
with the Governor's need to establish close partnerships between 
the state and local and regional transportation authorities. My 
relationship with both CSAC and the League of Cities will serve 
me in good standing. Since I was appointed Director of 
Caltrans, I've met with them on numerous occasions in regard to 
transportation issues, and I will continue to meet with them on 
a regular basis. 

In his budget, the Governor outlines two areas 
that are very important to his administration and which I know 
are important to yourselves. One is improving project delivery. 
The administration is committed to seeing highway resources 
translated into finished products as quickly as possible. 
Caltrans has developed significant improvements on its 
traditional mode of managing capital projects and estimating 
workload for capital outlay, design, and engineering. 

Formerly, capital projects were directed by 
functional managers, each of whom controlled a portion of the 
project. For example, right-of-way acquisition, environmental 
engineering design. 



12 

To improve accountability and delivery, Caltrans 
has implemented a new approach in which functional managers 
report to one central project manager, responsible for the 
entire project from inception to completion. 

With SB 45, the funding is now divided 25 percent 
for Caltrans, 75 percent for regional transportation 
authorities. Given that situation, it is incumbent upon 
Caltrans, in order to deliver projects more quickly and more 
effectively, to work in close collaboration with the regional 
transportation authorities, providing the technical assistance 
and any other necessary assistance so that we can move the 
projects quicker than has heretofore been the case. 

The Governor also in his budget specifically 
highlights the protection of the transportation investment. And 
this is, if there's one area that I am committed to, it's to 
protect the transportation investment that we make. 

We are blessed in California with having one of 
the outstanding transportation systems in the world. Yes, there 
are a number of areas that need addressing, and during my 
tenure, and following the leadership of Secretary Maria 
Contreras-Sweet, and the Governor, we will move swiftly and 
affirmatively to address those deficiencies. 

Now, as Director of Caltrans, I am not going to 
criticize what the previous administration might have or might 
have not done. I think what's important is to recognize the 
areas that we've done well, and improve on those. And the areas 
where we have not done so well, to focus on those areas and to 
improve them. 



13 

We have a very good transportation mix in 
California, where our railways are important, our waterways are 
important, our airways are important, our highways are 
important. We have to maintain them in good working order, and 
we have to maximize them to the fullest extent so that our 
residents and our businesses can move about our highways 
efficiently, safely, and economically. I am committed to 
delivering the necessary mandate for Caltrans. 

In certain areas I've already taken positive 
steps. For example, trucks carry 80 percent of goods in the 
State of California. So, I am — I have taken affirmative steps 
to set up a Trucking Desk so that, together with the trucking 
industry, we can address issues of safety, and also do whatever 
is necessary to reduce down time for trucks, and to be able to 
move their cargo more effectively. 

I had an opportunity to dedicate direct service 
from Sacramento to Bakersfield. So, I had an opportunity to 
meet with the President of Amtrak, to meet with the officers of 
Union Pacific, Burlington, Santa Fe, and I am committed to not 
only helping to improve the rail system in California, but also 
to foster a closer partnership between trucking and the railway 
industry, because I think they should be mutually supportive, 
the same way that we should encourage relationships and 
partnerships among the air service, the shipping industry, the 
rail industry, and the trucking industry. I am committed toward 
that end. 

The Governor has also stated his commitment to 
diversity. And I want to see to it that we have equal 



14 

opportunity at Caltrans, that we launch an aggressive effort to 
make sure that we have a representative applicant pool, and to 
provide opportunity to residents of California. 

I am confident that with the personnel that we 
have at Caltrans, the resources that have been given us, that we 
can do a lot to improve transportation and transit in 
California. 

I myself am not an engineer, but I am smart 
enough to have taken two of the best engineers that Caltrans 
has: one in the person of Jim Roberts, the other in the person 
of Tony Harris. Together from day one, they have allowed me to 
keep Caltrans running without missing a step. 

And we have a lot of other good, talented people 
both within Caltrans and without, and I am committed to putting 
together a good team so that together we can manage the state's 
resources wisely and effectively. 

With that, I thank you for giving me this time. 
I'm open to any questions that you might have. 

CHAIRMAN BURTON: Senator Perata, did you want to 
comment before we have questions? 

SENATOR PERATA: Thank you, Mr. Chair. 

Members, I'm just here to offer my support and my 
experience with Caltrans in the short time that I've been in the 
Legislature, but the long time that I've lived in California. 

I have found over last three or four years that 
the organization has really gotten to be, if not top heavy, 
inert. Simple things that aggravate people such as myself, and 
I'm sure you, and certainly our constituents, was very difficult 



15 

to communicate to the top echelon of Caltrans. Why you'd close 
the lane in the middle of the day, for example, or an off ramp on 
the Bay Bridge at nine o'clock in the morning, somebody says, 
"We thought the commute was over with . " 

I always thought that these guys were out there 
having orange cone practice, because there were cones all over 
the freeway, but there was nothing going on. 

So, when I was dealing with that, it was just 
simple things like that that my constituents get very angry 
about. And it's simple things like that, when we put a bond on 
the ballot that people think about before they provide more 
money for infrastructure. 

What really appeals to me about Mr. Medina is 
that he comes from that same experience. You don't have to be 
an engineer. In fact, maybe the best thing to happen right now 
is we don't have that mindset in a department that really needs 
to regenerate itself, and needs to be able to figure out how to 
attack the problems that we have today, and the ones that are 
going to get worse day by day. 

It took nine years to rebuild the Cypress Freeway 
after the Loma Prieta Quake in Oakland. Nine years. And that 
was in part due to the fact that there was no administrative 
leadership to make sure that that project got done. 

So, I think it's time to have somebody that has 
the experiences that Mr. Medina has mentioned, someone that 
understands that the job is to make the organization work, and 
to serve the interests of our constituents. This state cannot 
operate to its full economic potential unless our transportation 



16 

system gets better. And I believe it's time to bring somebody 
in from the bottom who's seen it the way we've seen it at local 
government, driving the streets and the highways of California, 
and asks the same guestion at the top that everybody asks at the 
bottom: What the hell's going on? 

I urge your support for Mr. Medina. 

CHAIRMAN BURTON: I've got one that's better than 
yours. 

Representing Marin County, a lot of times I will 
come to Sacramento from Marin County. I used to come over 
Highway 37, and then I was told by Linda Graham, your staff 
person, that if you take the Richmond Expressway, you can 
definitely get there quicker and save 20 minutes, and you do 
that by going over the Richmond-San Rafael Bridge. 

Well, right after you go over the Richmond-San 
Rafael Bridge, you are faced with a lot of decisions, none of 
which give you a clue as to what to do. And several times I 
ended up back at Golden Gate Field on my way to San Francisco. 

[ Laughter . ] 

CHAIRMAN BURTON: So, I called Caltrans and said, 
"You ought to have some signage there. If I can't find my way, 
what about tourists?" 

And in two months, they are going to finally have 
signs. This has been a year project for me, and those who know 
me, I've been on it not for the public good, but for my own 
personal comfort. And it took that long to get signs up that 
just said, "This is the way to Sacramento," "That's the way to 
here," "That's the way to there." 



17 

I think one of the things that Senator Perata 
said, it is important. It's good to have people who represent 
constituents who complain about what's going on, as opposed to 
having somebody who is part of what's been going on and 
complaining. 

I'm not going to give you credit for getting 
those signs up, but it did happen on your watch. 

Senator Lewis. 

SENATOR LEWIS: I'm tempted to advise you to come 
down and drive the Orange County freeways and hope you get lost; 
we might get more money down there. 

Good morning, Mr. Medina. Going over your 
resume, you certainly have a very impressive and diverse resume, 
but for the most part, it's not in the area of transportation. 

I guess my first question to you is, why do you 
think Governor Davis singled you out to head Caltrans? 

MR. MEDINA: As I stated in my remarks, the 
Governor wants someone who is familiar with local government, 
and who can work in close cooperation with local government. In 
order to get the projects out faster we're going to need an 
effective working partnership with local government. 

The Governor also wanted someone who had 
experience in public policy and being able to carry out public 
policy, and understanding the role of the manager. And given my 
many years in public service, the Governor had confidence in my 
ability to manage the work force at Caltrans to make efficient 
use of the resources that we have, and also to move Caltrans 
into the 21st Century. 



18 

The President talks about building a bridge to 
the 21st Century. At Caltrans, we're prepared to build a 
highway into the 21st Century. 

SENATOR LEWIS: Since your ascension as Director, 
I'm sure you've had a million things on your plate. Have you 
ever had the opportunity to study any other state transportation 
systems, or have a major metropolitan area, to see if they're 
doing something different or better than we are? 

MR. MEDINA: In fact, I have had many 
opportunities. I had an opportunity to go to New York City and 
discuss with the officials in New York City how they were able 
to turn their transit system around. 

I had the same opportunity in Washington, D.C., 
and Chicago, and Boston. I visited the project that they have 
underway in Boston. 

So, I have had an opportunity to be aware of 
major transportation projects around the country. 

At one time, New York City had one of the worst 
transit systems in the world. They turned it around. They had 
a number of transit authorities that operated separately. They 
brought them together, and they were able to achieve certain 
economies of scale, have a greater degree of control. Now their 
system is one of the cleanest, safest. 

The same way for the Washington D.C. area. They 
were able to bring a lot of their transit agencies under one 
roof, under one authority. 

So, I have had that opportunity. 

SENATOR LEWIS: You mentioned Boston. I'm 



19 

intrigued by what they've been doing there. What did you learn? 

MR. MEDINA: What I learned in Boston was good 
for Boston, not necessarily good for San Francisco. Some of the 
streetcars that San Francisco put on its street, the City of 
Boston had turned down because they did not meet 
specifications. They went through an extensive testing program 
prior to accepting delivery of the light rail streetcars, which 
San Francisco did not adequately do. Therefore, they were able 
to avert a lot of the problems that San Francisco had with its 
streetcars . 

They are now putting a major thruway in the City 
of Boston. And so, I learned a lot about their right-of-way 
acquisition, the federal funding that they were able to obtain, 
the extensive effort that they mounted in regard to getting 
broad public support for that project. One of the most 
ambitious undertakings in the world. 

SENATOR LEWIS: You're right about that. 

In the Governor's budget, there is a $1.5 billion 
reserve in the current year. What in your opinion is the 
optimal size for reserve? 

MR. MEDINA: That's a policy question for the 
Governor to let me know what the proper reserve is. 

SENATOR LEWIS: There have been no discussions 
between you and the Governor relative to — 

MR. MEDINA: The Secretary and myself have been 
working in close collaboration to ensure that by getting our 
projects out in a more timely manner, that we will not have such 
a high cash reserve. 



20 

A lot of those moneys are already programmed. 
It's a matter of getting projects out quicker. 

SENATOR LEWIS: My understanding is that one of 
the things that's being done right now at Caltrans is staffing 
up to try to figure out how to spend the money, get it into the 
pipeline as quickly as possible. 

How many employees have been brought on recently, 
and what are your plans for the future? 

MR. MEDINA: We're staffing up very specifically 
because we know that we have certain projects to get out. The 
moneys that we have, have been programmed. So, we need adequate 
staffing levels to gets those out. 

We have given our over-all budget, we have 
approximately 20,000 personnel working for Caltrans. 

SENATOR LEWIS: Are you still hiring? 

MR. MEDINA: Caltrans is always hiring. 

SENATOR LEWIS: Are you increasing the size of 
your work force? 

MR. MEDINA: We are, yes, and that's again 
dependent on existing funding. 

SENATOR LEWIS: At that point in time when you 
reach the optimal number to spend down the surplus funds, what 
do you do at that point in time when you might be over staffed? 

MR. MEDINA: Again, our staffing is driven by the 
funding and the projects that we have to get out. When the 
funding goes down, and as the work load goes down, then 
organizationally you always needs to have a plan as to how to 
reduce your staffing levels. 



21 

In a lot of cases, it's by attrition. In some 
cases, people will complete the work that they set out to do. 
That is something that our administrative department, our 
personnel department, has already taken into account and are 
prepared to reduce staff as needed. 

SENATOR LEWIS: In your opinion, first of all, 
realizing the State Supreme Court decision on contracting out, 
but also from your own personal opinion because of your labor 
background, I would be kind of interested, do you think that 
contracting out has any role to play at all in transportation 
projects? 

MR. MEDINA: I will abide by the California 
Supreme Court decision in regard to contracting out. And there 
are certain instances where the Court does permit the letting 
out of contracts. If it's work that the state has not 
previously done, if there are not sufficient — for a given 
project in certain circumstances, the Court, on a case-by-case 
basis, will a allow some contracting out. But I will abide by 
the California Supreme Court decision. 

SENATOR LEWIS: According to the State 
Controller, we now spend more money, $3.7 billion, on mass 
transit than we do on local streets and roads. Apparently, San 
Francisco has the most successful mass transit system, but 
during peak hours about 20 percent of the people use it. 

Do you think it's appropriate that we spend over 
50 percent of those moneys to try to take care of 20 percent of 
the commuters' needs? 

MR. MEDINA: As I said previously, in California 



22 

we are blessed by having a good mix of transportation, a good 
mix of choices for the public. 

At one time it was thought that highways were 
getting the bulk of the money, and that public transit was not 
getting a sufficient share of the money. Rail certainly has 
never been of the opinion that they have gotten their fair share 
of the money. 

So, I think that based on public need and public 
demand, that the dollars do get apportioned accordingly. That's 
something that the Legislature is charged with doing. You're in 
touch with your constituents. They tell you where the money 
needs to be directed. 

San Francisco, by statute, as a city and county, 
has always received its share of federal and state dollars. But 
certainly, given the ridership that San Francisco carries, there 
always exists a need for even increased funding. But that's a 
situation that we have faced in California for some time. 

Funding is getting more adequate now, but we 
still have a lot of challenges in that area. 

SENATOR LEWIS: In the last 15 years, the number 
of trips on mass transit statewide has pretty much remained a 
constant figure, in spite of the increase in population. 

What does that tell you about the demand for mass 
transit in our state? 

MR. MEDINA: I think that in spite of that, that 
the demand for mass transit has remained fairly constant and 
will continue to need support. A lot of people that do not 
drive cars, they rely on mass transit. I think that we have to 



23 

give it adequate funding. What adequate funding will be, will 
be decided by yourselves and the federal government, but I think 
that mass transit certainly merits our strong support. 

SENATOR LEWIS: The California High Speed Rail 
Authority was created in 1996. I understand that it might go on 
the ballot in November of 2000. The project that's being 
contemplated might cost somewhere between $23 and $30 billion, 
which would make it the largest public works project in the 
history of the state. Can we afford that? 

MR. MEDINA: Well, that's up to the voters to 
decide. 

From Caltrans' perspective, we were very involved 
in the High Speed Rail Commission in providing technical 
support. They apparently have an advisory committee, and I will 
be taking the steps necessary to ensure that we participate on 
their advisory committee and that Caltrans retains a working 
relationship with High Speed Rail here in California. 

But they are their own authority. They're 
empowered. They are their own attorney. 

Because we are in the transportation business, I 
just want to make certain that we maintain a close working 
relationship with the High Speed Rail Authority. 

SENATOR LEWIS: In terms of the capital costs 
that would be funded into that project and the ongoing cost on a 
year-to-year basis, what do you think the appropriate recovery 
percentage would be? 

MR. MEDINA: Frankly, I know again that's a 
policy issue that's not within my purview to make, to give an 



24 

opinion on that, one way or the other. 

SENATOR LEWIS: Do you think that number could 
ever be so low that it'd be worth deciding not to go forward? 

MR. MEDINA: Again, that's up to the members of 
the High Speed Rail Authority and the Members of the Legislature 
to decide what is the proper amount there in that case. 

SENATOR LEWIS: Thank you, Mr. Medina. 

CHAIRMAN BURTON: Senator Knight. 

SENATOR KNIGHT: Thank you, Mr. Chair. 

Mr. Medina, just a question of interest. You 
said you weren't an attorney. You didn't take the Bar exam; is 
that it? 

MR. MEDINA: I took the Bar. I did not pass 
it. 

SENATOR KNIGHT: I was just curious. 

You all have been talking about San Francisco, 
and there are other parts to this state, you know. There are 
other transportation needs within the state other than San 
Francisco. 

CHAIRMAN BURTON: You're treading on very 
dangerous waters. 

But anybody who flew faster than Chuck Yeager can 
be fearless. 

SENATOR KNIGHT: You're right. 

Anyway, we have some problems in other parts of 
the state, and in particular in the Antelope Valley. We have 
Highway 138 that connects the Antelope Valley with Highway 15, 
and is a significant commuter highway, and it's a two-lane 



25 

highway. It's called a death trap, Blood Alley, all kinds of 
appropriate adjectives defining that highway. 

I would like some consideration for improving 
those kinds of highways in the state. 

We have another one that's called 395. It goes 
north and south up to Mammoth. It presents similar problems. 

What are your thoughts on some of those issues? 

MR. MEDINA: Since you brought this issue to my 
attention, Senator, I assigned my staff to get me all of the 
relevant information on your area, which I will not go over with 
today. But I have urged them — the projects that we have under 
way that are safety related projects, to see to it that we move 
them as quickly as we can. 

In similar situations, I had a similar situation 
where the Assemblyman that represents the area between Morgan 
Hill and Gilroy, the supervisors, the mayors of Morgan Hill and 
Gilroy brought to my attention the number of head-on collisions 
that they have had in that portion of Highway 101 and the need 
for a barrier. And so, we moved ahead on the median barrier. 
More importantly, where our own people had told us it would take 
100 days to complete the median concrete barriers, by dividing 
the contract into two and getting them under way simultaneously, 
we were able to cut the delivery time from 100 days to 50 days, 

So, we will take care to look at areas such as 
the ones that you've mentioned here to ensure that we complete 
the necessary construction to ensure safety, and that we do it, 
again, as expeditiously as possible. And we will continue to 
work with you in regard to these. 



26 

SENATOR KNIGHT: Has your staff suggested 
possible center barriers even on 138 in areas where it has been 
expanded to four lanes? 

MR. MEDINA: If that is part of the solution, we 
can certainly explore that. 

SENATOR KNIGHT: But I would assume that your 
people would understand safety implications and would make those 
recommendations on their own. 

MR. MEDINA: I think our people are very capable, 
and in regard to any design, in regard to any construction, we 
would certainly meet with you in regard to those. 

SENATOR KNIGHT: Thank you. 

One other concern, HOV lanes. Sorry, 
Mr. Chairman. 

But we've been working to expand Highway 14, 
which is a single link between the Antelope Valley and the L.A. 
basin. It's the only roads out of the Valley north and south. 

They've chosen to put HOV lanes in some of the 
areas on Highway 14. You go for a stretch leaving Palmdale, 
then you get in an HOV lane. All of a sudden it quits. You go 
for three or four more miles, then you get on another section of 
HOV lanes, and pretty soon it quits. 

They don't go anywhere. They don't do anything 
other than cause people to get in over another lane, and then 
there are only two or three cars over there, and you've taken up 
a whole lane. 

I don't know what use those HOV lanes on 14 are. 

MR. MEDINA: The federal government and other 






27 

transportation policy makers have designated HOV lanes as useful 
tools in relieving congestion and helping to improve air 
quality. 

SENATOR KNIGHT: Recognizing that usefulness, if 
they go someplace. But putting a highway out here that has a 
beginning and an ending, and it doesn't do anything, it's kind 
of — and as far as the federal government and their 
contribution to the construction of those, then, you know, why 
don't we tell them they're useless? 

MR. MEDINA: That's not my place to do so, 
Senator. You can tell the federal government. That's certainly 
your place. 

However, I have had discussions with the Chairs 
of the Senate Transportation Committee, Chair of the Assembly 
Transportation Committee, as well as the Commissioner for the 
Highway Patrol. And certainly, there are concerns in regard to 
the lack of uniformity. For HOV lanes in certain areas, HOV 
lanes operate 24 hours, on a 2 4 -hour basis. On others, they 
operate in hours that may not coincide with peak use. 

Certainly we need something more uniform, and I 
am prepared to work with the policy makers so that we can 
improve HOV lanes in the State of California. 

SENATOR KNIGHT: Just one other item. 

The high desert area is programmed to reach a 
million people within the next 10-12 years. That's where the 
growth is going to be. 

I would hope that Caltrans is thinking about that 
kind of growth and those kinds of transportation problems that 



28 

are going to be caused by that growth, an additional highway out 
of the Valley. 

When we had the earthquake, we were cut off. No 
way to get anywhere other than north. 

So, a second highway out of the Valley, and 
improving the two lanes so that we can go east and west and 
north. 

Thank you. 

MR. MEDINA: Thank you, Senator. 

CHAIRMAN BURTON: Follow-up question, Senator 
Lewis. 

SENATOR LEWIS: Following up Senator Knight, 
talking about HOV lanes, it's my understanding that HOV lanes 
account for about 2 5 percent of the lanes, and yet seven percent 
of the usage. So it doesn't seem to be meeting the goals that 
the federal government seemed to think it would. 

Would you support any kind of a study to 
determine whether or not HOV lanes are effective in doing what 
they are supposedly designed to do? If you would do that, if it 
turned out that at least some, if not all, of the HOV lanes were 
ineffective, would you be willing to petition the federal 
government to allow us to try to make them full-use 
lanes? 

MR. MEDINA: Again, that's a policy question. I 
am prepared to work with both the Assembly and the Senate in 
reviewing HOV lanes. 

Right now, a lot of the hours of operation, and 
how many persons can ride in the car on the HOV lanes, that's up 



29 

to local decision. So, there is a lack of uniformity. 

Just based on my discussions with the Highway 
Patrol and the two leaders of the Transportation Committees, 
there is a need to review and to improve the current situation. 
I will follow their lead. 

CHAIRMAN BURTON: Just following up on that, 
first of all, let me ask a question. 

HOV lanes, are they mandated by the feds, 
encouraged by the feds? 

MR. MEDINA: They are mandated by the federal 
government. If you construct new lanes, you have to have HOV 
lanes in the mix. 

CHAIRMAN BURTON: In the mix. Do they tell you 
the hours? 

MR. MEDINA: No, that's for local decision. 

CHAIRMAN BURTON: So there's some flexibility? 

MR. MEDINA: There is. 

CHAIRMAN BURTON: Because, and I don't know if 
you noticed it, Jose, but on 1-80, they used to have the HOV 
lanes were, I think, six to nine, and three to six, or four to 
seven, I think actually. Then something happened, and they were 
damn near all day. And it was supposedly part of the deal they 
made with Oakland when they did all that stuff, you know, around 
Emeryville, and going up towards Golden Gate Fields, going that 
way, and then coming from Golden Gate Fields to the Bridge going 
west. 

A lot of us beefed about that, Members. So then 
they reduced it, but it's still kind of goofy. In other words, 



30 

the traffic patterns are kind of clear; the traffic is going 
1-80 west in the mornings and east in the evenings. They're 
commuting into the city and out of the city, or to Oakland. And 
out of Oakland going up to wherever they go, whether it's into 
Solano County. 

So, we complained, and they reduced it somewhat. 
And I think it's now like three to seven, but it doesn't make 
any God damn sense. 

I will drive home at three in the afternoon. 
There ' s a whole empty lane that nobody can use because they do 
not have three people in their cars, because that HOV west acts 
as if it was the high commute time. 

I would think at some point, and I don't know if 
it's the locals or what, but at some point, I think the HOVs 
make sense in heavy commute times. In a non-heavy commute time, 
they don't. 

That's why I think a study, and we could work on 
it, but to help you figure out, you know, when they work, when 
they're needed, and when they aren't. That's one. 

Two, on the Highway 101 bottleneck going outside 
of Novato heading into Sonoma County, which has been a problem 
for years, it would be a tremendous environmental problem if 
they tried to cut into the hillsides on the outside, away from 
the center barriers. 

But as you drive that, you can see several areas 
where they could actually, at least for periods of time, extend 
and end up with an extra lane going each way, going in towards 
the middle. Then there's some areas where it would again get 



31 

back to two. But it would be kind of like old Highway 37, where 
you had passing lanes, and then you didn't have passing lanes. 

And I would hope that your people would look at 
that as really kind of a short-term solution to the problem of 
that 101 Corridor. 

I mentioned it once, and the guy looked at me 
like I was nuts, so I drove by again and thought that maybe they 
could do it, maybe they couldn't, but they refused even to look 
at whether or not you could provide some extra laneage in pretty 
substantial portions heading up into Santa Rosa. 

I realize fully the problems, as I said, if they 
tried to put an extra lane on the outside and cut into the 
mountains, then you're going to be in courts with the enviros. 

I would encourage you to look at those two 
issues. 

MR. MEDINA: We certainly will, Senator. 

SENATOR BACA: Mr. Medina, I appreciate your 
background and your experience that you had. It seems like you 
have a lot of experience in policy management, and I think it's 
very important, especially as you look at the responsibilities 
that you have. I'm impressed with the experience that you had. 

One of the questions that Senator Lewis asked, 
about the increase of work force, you know that it's very 
important to have the increase of work force because the 
population is going to increase, so the demand for 
transportation is going to be there; is that correct? 

MR. MEDINA: That's correct. 

SENATOR BACA: So, there is a need in terms of 



32 

the work force. I'm sure that in terms of evaluation, that 
you'll have an opportunity, as you grow with the 
responsibilities of being the Director, that you'll be able to 
assess and evaluate based on what projects, or priorities, or 
areas need to be. So, at that time, then I believe that you can 
come back with recommendations, whether you need to continue 
with the work force, whether you continue with the projects, 
which could be a cost savings I'm sure that you'll analyze and 
present back to us; is that correct? 

MR. MEDINA: We certainly will do that, Senator. 

SENATOR BACA: One of the other things, and I do 
appreciate that you're responsive to a lot of the concerns. I 
notice that even our supervisor from our area has written a 
letter and you responded, in the Inland Empire. 

I'm glad that Senator Knight mentioned that there 
were other areas, other than the northern portion, because we do 
have projects in our immediate area. Hopefully, somewhere along 
the line, Mr. Medina, you could look at, as we're looking at the 
Route 3 in our immediate area, that hopefully completion of 
that, and in dealing with the problems that we're going to have 
as we look at the population doubling from 3 to about 60-some 
million in the future, we have a lot of the trucking industry 
that will be in the Inland Empire. And hopefully, you can look 
at and study that too, as well as a study on how we deal with 
transportation, meeting the demands and the needs in that area. 

Will you please look at that? 

MR. MEDINA: We certainly will, Senator. 

SENATOR BACA: One of the things that I'd like 






33 

you to look at as Director, there are so many freeways that are 
being built, and highways that are being done. And part of the 
problem has been how they're constructed as well. Sometimes, 
there's no off ramp. There's only off ramps to one area, so 
another segment of the community, such as my area — we're in 
what we consider the barrio — in that area there's no off ramps 
in that area, so all the businesses went into one end of the 
town. 

Hopefully, future studies, you can look at 
particular projects that you have off ramps to both sides, not 
just to one end of the town, which I think is very important. 
Hopefully, you'll look at that in the future as well. 

MR. MEDINA: We certainly will, Senator. That's 
been brought to my attention in regard to sound walls in a 
similar situation. 

SENATOR BACA: Just one final question. 

I know that under the past administration, it was 
reported there's been a high administrative cost. 

Have you had chance to learn why the cost has 
been so high in the past? Are you looking at ways to reduce 
administrative costs? Most of it has been in administrative 
costs, not in projects. 

MR. MEDINA: You have to look at all of the 
areas, Senator, to make sure that you make the most effective 
use of the moneys that you have. That's certainly something 
that I'm committed to, and I'm working with my staff. 

SENATOR BACA: I appreciate you looking into 
that. Thank you very much. 



34 

CHAIRMAN BURTON: Senator Hughes. 

SENATOR HUGHES: Hello, Mr. Medina. I'm glad to 
see you today. 

I'm really in agreement with Senator Burton on 
the fact that you need to look at the HOV, and how it differs 
from one part of the state to another. Not only the hours, 
which he talked about. You know, it says you use the Diamond 
Lanes during certain hours in certain places. And it's hard to 
read the hours when you're driving. 

And the other thing that concerns me, Senator 
Burton, have you noticed, and I know it's where you drive all 
the time around 80, sometimes it says, "two people in a 
vehicle," and others say "three in a vehicle." 

So, there's got to be some kind of consistency. 
How do you expect the people to read the fine prints and see, if 
it's this hour, should I have two people in the vehicle, or 
should I have three? 

CHAIRMAN BURTON: I do use that excuse when the 
Highway Patrol stops me. 

[ Laughter . ] 

SENATOR HUGHES: No, but it's hard to even read 
it, whether it's two or three. 

And how do you even teach driver's ed? How do 
people know? 

It should be some sort of consistency. Do you 
have some plans? It depends on whether you're driving in 
Northern California or Southern California, or San Jose, or on 
the road to Oakland. It's weird that we don't have any 



35 

standardization, and how do you expect people to really know? 

People want to live within the law. They want to 
do the right thing. But if it's inconsistent, are you going to 
try to rectify that? 

MR. MEDINA: Again, I will be working with both 
the Senate and Assembly Transportation Committees in regard to 
this issue, and also with the local transportation authorities 
to make sure that we have some consistency and uniformity in 
regard to HOV lanes. 

SENATOR HUGHES: Thank you, and I think we should 
alert people who are teaching driver's education that our 
driver's education is not consistent. 

MR. MEDINA: Yes, thank you. 

SENATOR BACA: Mr. Chair, I move the 
confirmation . 

CHAIRMAN BURTON: Let's have witnesses in support 
briefly. 

MR. GONZALES: Senator Burton and Members of the 
Committee, I'm neither an engineer nor an attorney, but I am Ron 
Gonzales, the Mayor of San Jose, the largest city in Northern 
California. 

I do want to just tell you that I've traveled 
from San Jose to support this confirmation. And tell you that 
as a long-time friend of Jose Medina's and a colleague, I'm 
personally here to tell you that I trust this man and trust his 
abilities to lead the improvement of our state's infrastructure, 
whether it is be the roads, the rail, or other means in terms of 
air transportation. 



36 

I'm also pleased to bring with me letters of 
support from a number of our business leaders in Silicon Valley. 
They include: Lew Piatt, the Chairman, President and CEO of the 
Hewlett Packard Company, which is the largest employer in 
Silicon Valley; Leslee Coleman, the Executive Director of the 
American Electronics Association for Bay Area; Wade Randlett, 
Political Director of the Technology Network; Ruben Barrales, 
President and CEO of Joint Venture: Silicon Valley; and Carl 
Guardino, President of the Silicon Valley Manufacturing Group. 

All of these people are people that Mr. Medina 
will work with, along with mayors and county supervisors, in our 
community as we try to improve our infrastructure in our 
community and continue to meet the needs of our employers that 
help drive the economy of the State of California. 

Thank you, Mr. Chair. 

CHAIRMAN BURTON: Thank you very much, 
Mr. Mayor. 

Just name, organization, and the fact that you 
support, please. 

MS. BARAJAS: Good morning. My name is Griselda 
Barajas. I'm with the Sacramento Hispanic Chamber of Commerce 
and Vice President of Business Advocacy. 

We are here in support of Jose Medina. 

MR. RUEDA: Good morning, Mr. Chairman and 
Members of the Committee. I am John Rueda. I'm here 
representing the California Hispanic Chambers of Commerce. We 
have over 50 member Chambers and over 25,000 Latino business 
owners . 



37 

We support confirmation of Mr. Medina as Director 
of Cal trans. Thank you. 

MR. COHEN: Good morning, Mr. Chairman and 
Senators. My name is Paul Cohen. I am here on behalf of 
Northern California Carpenters. We've worked closely with 
Mr. Medina on a number of public policy issues in San Francisco. 

We strongly support his confirmation and look 
forward to working with him on issues of importance to all 
Calif ornians. 

If I might, Mr. Chairman, on a personal note, as 
you know, I have the privilege of serving as Vice Mayor of San 
Rafael. And speaking personally and on behalf of my 
constituents, I look forward very much to working with the 
Department of Transportation headed up by someone who brings to 
the table the kind of experience with local government that 
Mr. Medina will. 

CHAIRMAN BURTON: Thanks, Paul. 

MR. ARANGO: Good morning, Senator. I am Rolando 
Arango, President of the California Hispanic Professionals 
Association. 

We are honored and pleased to see someone that 
reflects who we are sitting in a position that Mr. Medina will 
be sitting. We are proud of Mr. Medina, and we thank Governor 
Davis for appointing him. And we'll be very pleased and 
grateful to you when you put Mr. Medina, representing all of us 
Calif ornians . 

Thank you. 

MR. VILLAREAL: Good morning, Mr. Chairman, 



38 

distinguished Committee Members. My name is Massey Villareal. 
I'm the Chairman of the Board of the United States Hispanic 
Chamber of Commerce, based in Washington, D.C., representing 
one-quarter million Hispanic businesses in this county. 

I'm here to endorse the confirmation of 
Mr. Medina. Thank you very much. 

MR. ACKERMAN: Mr. Chairman and Members, Dave 
Ackerman, representing the California Chamber of Commerce and 
the Associated General Contractors. 

We've spent considerable time with Mr. Medina, 
and I'm pleased to endorse his confirmation before your 
Committee. Thank you. 

MR. SPAHN: Mr. Chairman and Members, Les Spahn 
on behalf of the National Railroad Passenger Corporation, better 
known as Amtrak. Its Chairman of the Board, Governor Tommy 
Thompson of Wisconsin, its Vice Chairman, former Governor of 
Massachusetts, Michael Dukakas. 

Amtrak strongly supports Mr. Medina's 
confirmation as a strong policy for rail in the State of 
California. Thank you. 

MR. SMITH: Mr. Chair and Members, D. J. Smith, 
representing Transportation California, which is a coalition of 
transportation contractors that build the transportation 
projects and the construction trade unions who work on them. 

We also represent four self-help counties in the 
state: Contra Costa, Santa Clara, Riverside, and San 
Bernardino. 

We are in strong support of Jose's nomination. 






39 

We worked with him extensively in the time that he's been 
appointed in the job. We think he's put together a very good 
team around him to get us moving again. 

Thank you. 

SENATOR BACA: D. J. , those were from the Inland 
Empire; right. 

MR. HARD: Good morning, Mr. Chairman and 
Members. My name is Jim Hard. I've been a state employee for 
24 years. I am the Civil Service Division Director for 
California State Employees Association, SEIU Local 1000. We 
represent 80,000 state workers, thousands of them at Caltrans. 

We are here to endorse Mr. Medina's confirmation. 
Thank you very much. 

CHAIRMAN BURTON: Good to see you out of your 
T-shirt. 

[Laughter. ] 

MS. GUTIERREZ-GARZA: Hello. My name is Irene 
Gutierrez-Garza. I represent the Southern California Region of 
CAFE. 

And living in the Southern California, we want to 
be able to express our strong support for Mr. Medina. Thank 
you. 

MR. CREMINS: Good morning. Tim Cremins of the 
Operating Engineers in full support also. 

We represent the maintenance division within 
Caltrans, and also we are signatory to some of the largest road 
builders in the state, and we're in full support. Thank you. 

MR. DIAZ: My name's Marshall Diaz. I'm from 



40 

Los Angeles. I'm part of also CAFE de California, and deal with 
all the issues in Southern California dealing with our 
membership in Caltrans. 

I also represent two other nonprofit 
organizations, Projecto del Barrio, which is the largest Latino 
organization in the San Fernando Valley, and also Senso del 
Pueblo at Echo Park. 

I'm also the Chair of the L.A. County-City Latino 
Redistricting Coalition. I'm not speaking on behalf of them. I 
just want to let you know that I am the Chair of that coalition. 
We do have members of that coalition that are supporting the 
confirmation of Mr. Medina. That includes the City Employees' 
Latino Association, the County. We have about 20 organizations 
that individuals will be supporting Mr. Medina. 

So, we would like so see a unanimous Aye vote for 
his confirmation. Thank you. 

MR. ORTEGA: Thank you. My name is Sam Ortega. 
I'm the President of Apollo Marketing. I'm also the 
Vice-President of the California Mexican-American Veterans 
Memorial. 

we have one report card on Mr. Medina, and as 
such, we wholeheartedly endorse him. He gets good marks from 
us. Thank you. 

MR. LIRA: Good morning, distinguished Members, 
Mr. Chairman. My name is John Lira. I serve on the 
Telecommunications Commission of San Francisco. I also run my 
own software company. 

I'm here to encourage my support for our 



41 

Supervisor, Jose Medina. He'll be great for California and also 
great for the Latino community. Thank you. 

MR. PERNELL: Good morning, Mr. Chairman, 
Members. My name is Robert Pernell. I represent the California 
State Council of Laborers. And we are in very strong support of 
the nomination. 

Thank you. 

MR. AQUINO: Good morning. My name is Carlos 
Aquino. I'm originally from the city of L.A. , Los Angeles, now 
living in San Francisco. I'm involved with several 
organizations in Ambiente, which is a Latino HIV prevention 
program in San Francisco, and also the Democratic Club, Ambiente 
de Latino Democratic Club. 

I'm here to show support for Jose Medina for 
Directs of Caltrans. 

MS. FISCAL: Good morning, Senators. My name is 
Paula Fiscal. I'm a Commissioner in the City of San Francisco 
for the city-wide Alcoholism Advisory Board. And I am also here 
to encourage you to confirm this nomination of Jose Medina. 

I myself have served with him on the Mission 
Council on Alcohol Abuse for the Spanish speaking. As a fellow 
board member, Jose is quiet yet always makes sound judgments. 
He is sometimes mistaken for being a little too quiet, but 
that's because he's put his data base in research. 

So please, do confirm him as quickly as possible. 
We're very proud of him. Thank you. 

MR. LOPEZ: Mr. Chairman and Committee Members, 
my name is oppose number Edmundo Lopez. I'm here on behalf of 



42 

the Hispanic Contractors Association, a statewide organization, 
and on behalf of the Mexican-American Business and Professionals 
in San Diego. 

We believe strongly that Mr. Medina will do an 
outstanding job for California and its citizens, and we strongly 
support his confirmation. Thank you very much. 

MR. HEMBY: Mr. Chairman, Bill Hemby with the 
California Organization of Police and Sheriffs. 

We support Mr. Medina's confirmation. Thank 
you. 

MR. CHAVEZ: My name is Floyd Chavez. I'm 
representing the Northern California Latin Business Association. 

We are in strong support of Mr. Medina and his 
appointment. 

MR. GUERRERO: My name is Paul Guerrero. I'm 
representing the California Small Business Alliance. 

We are strong support of Mr. Medina. 

MS. LaCOME: Good morning. I'm Diana LaCome. I 
represent the National Concilio of America and our California 
affiliates. 

We strongly support Mr. Medina. 

MS. BAKER: Mr. Chairman, Members of the 
Committee, DeAnn Baker representing the California State 
Association of Counties. 

we've found Mr. Medina to be very thoughtful and 
responsive, and we're in full support of his nomination and 
confirmation. 

MS. FOOMAN: Good morning. I'm Natasha Fooman, 



43 

representing the League of California Cities. The League of 
California Cities is in very strong support of the Governor's 
appointment to Mr. Jose Medina as Caltrans Director. 

We've had first experience with Mr. Medina as a 
previous representative of the League. And his strong 
leadership and his ability is to work very closely and on 
important issues for public policy under local government has 
pointed a very — has brought a big asset for the League. 

Therefore, our President has appointed him as 
Chair of our committee prior to him being appointed as Caltrans 
Director. 

CHAIRMAN BURTON: You're in support? 

MS. FOOMAN: Yes, thanks. 

MR. McKAY: Good morning. My name's Robert 
McKay. I'm President of American Indian State Employees of 
California. 

We've met with Mr. Medina, and we really support 
his confirming. Thank you. 

MR. COPELAN: Good morning. My name is Craig 
Copelan. I'm President-elect of Professional Engineers in 
California Government. 

We have met with Mr. Medina, and we're in strong 
support of his confirmation today. Thank you. 

MR. GARCIA: Mr. Chairman, Members, thank you. 
I'm Bill Garcia, and I'm representing the American GI Forum, 
State of California. 

Our Chairman is out of state. He had a death in 
the family or he would be here, Mr. Fred Coca. I'm the 



44 

Legislative Chairman for the American GI Forum, State of 
California. 

We strongly support Mr. Medina. We've met with 
him. He has passed the test that we have. We're particularly 
impressed with his track record and his commitment to improving 
public transportation systems. 

We have guite a number of veterans that live in 
the core cities across the State of California. They need mass 
transportation; they also need public transportation within the 
city. We have a lot of homeless veterans. 

We are convinced that he would be good for this 
job. We ask your unanimous endorsement for his confirmation. 

Thank you very much. 

MR. SHAWNEEGO: Ben Shawneego, President of the 
National Indian Contractors. Although we're a national 
organization, our headguarters is in California, and we have 
many Indian contractors on roads. 

And we certainly endorse Mr. Medina. 

MR. MOLINA: My name is John Molina, with Labor 
Council for Latin American Advancement, also delegate to Central 
Labor Council, President of the Union label. 

I'm here to endorse Jose Medina. I've known him 
for years. He's really the excellent choice of the Governor. 
Thank you. 

MR. LEMMONS: I'm John Lemmons. I'm speaking on 
behalf of State CAFE. Their members emphatically support 
Mr. Medina. 

MR. RAMIREZ: Good morning. My name is Frank 



45 

Ramirez. I'm the National Advisor to the American GI Forum. 

We strongly endorse the confirmation of 
Mr. Medina, an outstanding man. 

CHAIRMAN BURTON: Thank you. 

MR. VELLANOWETH : Good morning, Senator Burton 
and distinguished Members. 

My name is Roberto Vellanoweth. I'm here 
representing LULAC, the oldest Hispanic organization in the 
nation, and in total support of Mr. Medina's confirmation. We 
wish him well and know that he will be a great asset to the 
State of California and to the transportation business. 

Thank you very much. 

MR. ORTEGA: Ladies and gentlemen, I am Raul 
Ortega, Commander, Modesto Chapter, here to support 
Mr. Medina, and hopefully, we hire veterans. 

Thank you. 

CHAIRMAN BURTON: Quickly. 

MS. SAMANSUETTI: Good morning. My name is Zelda 
Samansuetti, President of the American-Mexican War Mothers 
Organization of California. 

We are here to support Mr. Medina very strongly. 
We need more men like him. God bless all of you. 

CHAIRMAN BURTON: Thank you. 

MR. DRUMHELLER: My name is Don Drumheller, past 
Department Commander for the American Legion, member of the 
National Organization of the American Legion. 

And I'm here to support Mr. Medina, and hope he 
has a drawer full of Maalox and things that he's going to need. 



46 

MR. CAMACHO: My name is Julian Camacho. I'm 
here representing the Northern California 8A Association. It's 
an association of engineers and contractors throughout 
California . 

We're very pleased to see Mr. Medina and your 
attention to his confirmation. Thank you. 

CHAIRMAN BURTON: Good to see you, Julian. 

MR. ASSAGAI: Mr. Chairman and Members, Mel 
Assagai, representing the California Trucking Association. 

We are very strongly supportive of Mr. Medina. 
We think he'll do a wonderful job. Thank you. 

MR. JACOBVITZ: I'm Robert Jacobvitz. I'm the 
Executive Director of the American Institute of Architects in 
San Francisco. 

I've had the honor and — 

CHAIRMAN BURTON: You're in support? 

MR. JACOBVITZ: I'm in support as well as the 
state. Thank you. 

MR. YBARRA: I don't get paid by the word, but 
you know our Caucus supports our member. 

MS. VILLA: Good morning. My name is Maria Luisa 
Villa. I belong Comite Mexicano Civico Patriotico, San 
Francisco. And I said one thing, that when I put an eye on a 
person that had respect, integrity, and responsibility, that's 
Jose Medina. 

Another person that I helped in politicians, I 
put a good eye, you know, on them, and they never fail. They 
always smart, responsible, and they always on top. 






47 

Thank you very much. 

MR. ALDAPE: Mr. Chairman, I apologize for 
sitting and waiting, but I had a stroke a couple years ago. 

CHAIRMAN BURTON: That's all right. 

MR. ALDAPE: My name is Dave Aldape. I'm past 
Director of the Mission Coalition, an organization in San 
Francisco, and I'm with Mission Council on Alcoholic Abuse for 
the Spanish Speaking. 

We are here in support of Jose Medina. Thank 
you. 

MR. CASCIATO: Al Casciato, former President of 
the San Francisco Police Officers Association, representing 
Christopher Cunning, current President, San Francisco Police 
Officers Association. 

We are in full support of Mr. Medina's 
confirmation. 

CHAIRMAN BURTON: Any opposition. 

SENATOR BACA: Mr. Chairman, I was just going to 
make a comment. I hope Mr. Medina isn't running for public 
office. 

CHAIRMAN BURTON: Don't worry about it. He's not 
in your district; he's in mine. 

[ Laughter . ] 

CHAIRMAN BURTON: Senator Baca moves. Call the 
roll. 

SECRETARY WEBB: Senator Baca. 

SENATOR BACA: Aye. 

SECRETARY WEBB: Baca Aye. Senator Hughes. 



48 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Five to zero. 

CHAIRMAN BURTON: I think that you had a tough 
road, I think, coining in here. You answered the questions. 

The thing that I believe won over some of the 
Members that may have had some questions is the fact that they 
understand that you are going to be responsive to the needs of 
their constituency, and it's not really bad to have somebody who 
has been involved in the political process to be on top of a 
bureaucracy, because we have as much as trouble with the 
bureaucrats as the citizens do. 

And Jose, I want to congratulate you. You ought 
to be very proud of the unanimous vote and the support of all 
your friends and these people who came. 

MR. MEDINA: Thank you, Mr. Chair. 

[Thereupon this portion of the 

Senate Rules Committee hearing was 

terminated at approximately 12:02 P.M.] 
— 00O00 — 






49 



CERTIFICATE OF SHORTHAND REPORTER 

I, EVELYN J. MIZAK, a Shorthand Reporter of the State 
of California, do hereby certify: 

That I am a disinterested person herein; that the 
foregoing transcript of the Senate Rules Committee hearing was 
reported verbatim in shorthand by me, Evelyn J. Mizak, and 
thereafter transcribed into typewriting. 

I further certify that I am not of counsel or 
attorney for any of the parties to said hearing, nor in any way 
interested in the outcome of said hearing. 

^ IN WITNESS WHEREOF, I have hereunto set my hand this 
3 ^ day of ^yylOA cAy 1999 . 




iTVELYN J. Xezak^ 
Shorthand Reporter 



369-R 

Additional copies of this publication may be purchased for $3.50 per copy 
(includes shipping and handling) plus current California sales tax. 

Senate Publications 

1 020 N Street, Room B-53 

Sacramento, CA 95814 

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Make checks payable to SENATE RULES COMMITTEE. 
Please include Stock Number 369-R when ordering. 



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^ HEARING 

SENATE RULES COMMITTEE 



STATE OF CALIFORNIA 



DOCUMENTS DEPT. 




APR " 7 1239 

SAN FRANCISCO 
PUBLIC LIBRARY 



STATE CAPITOL 

ROOM 113 

SACRAMENTO, CALIFORNIA 

WEDNESDAY, MARCH 17, 1999 
9:30 A.M. 



368-R 



SENATE RULES COMMITTEE 
STATE OF CALIFORNIA 



HEARING 



STATE CAPITOL 

ROOM 113 

SACRAMENTO, CALIFORNIA 



WEDNESDAY, MARCH 17, 1999 
9:30 A.M. 



Reported by: 



Evelyn J. Mizak 
Shorthand Reporter 



11 



APPEARANCES 

MEMBERS PRESENT 

SENATOR JOHN BURTON, Chair 

SENATOR JOHN LEWIS, Vice Chair 

SENATOR JOE BACA 

SENATOR TERESA HUGHES 

SENATOR WILLIAM KNIGHT 

STAFF PRESENT 

GREG SCHMIDT, Executive Officer 

PAT WEBB, Committee Secretary 

NETTIE SABELHAUS, Consultant on Governor's Appointments 

WADE TEASDALE, Consultant to SENATOR LEWIS 

FELICE TANENBAUM, Consultant to SENATOR HUGHES 

ANDY PUGNO, Consultant to SENATOR KNIGHT 

MANNY HERNANDEZ, Consultant to SENATOR BACA 

ALSO PRESENT 

AILEEN C. ADAMS, Secretary 

State and Consumer Services Agency 

SENATOR PATRICK JOHNSTON 

CATHERINE FARMAN 
Rape Treatment Center 
UCLA Medical Center 

SHARON ENGLISH 
Private Citizen 

HARRY M. SNYDER 
Consumers Union 

DONNE BROWNS EY 

California Nurses Association 

DAN CURT IN 

California Conference of Carpenters 



Ill 



ART CARTER 

California Pipe Trades Council 

State Association of Electrical Workers 

JOANNE McNAB 

Women' s Appointment Project 

LON S. HATAMIYA, Secretary 
Trade and Commerce Agency 

SENATOR TIM LESLIE 

SENATOR JOHN VASCONCELLOS 

CHRIS MICHELI 

Semiconductor Equipment & Materials International 

Lockheed Martin Missiles and Space 



IV 

INDEX 

Page 
Proceedings 1 

Governor's Appointees; 

AILEEN C. ADAMS, Secretray 

State and Consumer Services Agency 1 

Introduction and Support by 

SENATOR PATRICK JOHNSTON 1 

Background and Experience 2 

Questions by CHAIRMAN BURTON re: 

Request to Look Fairly upon 

Legislation Affecting Departments 

Within the Agency 5 

Status of Y2K Problem 5 

Questions by SENATOR LEWIS re: 

Administration' s Policy on 

Union-only 6 

Budget Augmentation for Additional 

Staff at Franchise Tax Board 7 

Thoughts on Merging FTB and Board 

Of Equalization 7 

Questions by CHAIRMAN BURTON re: 

Number of Reduced Positions at FTB 8 

Questions by SENATOR HUGHES re: 

Problem with Proposed Science Center 

School in District 9 

Collection of Data by State Personnel 

Board in Wake of Prop. 209 11 



State Auditor's Report Criticizing 

DFEH Management Practices 11 

Questions by SENATOR BACA re: 

Efforts to Ensure Women and Minorities 

Are Notified of Job Opportunities 12 

Contracting Out for DGS Services 13 

Questions by SENATOR KNIGHT re: 

Elaboration on Statement about 

Not Having Patience with Bureaucracies 14 

Statements by CHAIRMAN BURTON re: 

East End Project in San Francisco 15 

Motion to Confirm 16 

Witnesses in Support: 

CATHERINE FARMAN 

Rape Treatment Center 

UCLA Medical Center 17 

SHARON ENGLISH 

Private Citizen 18 

HARRY SNYDER 

Consumers Union 18 

DONNE BROWNSEY 

California Nurses Association 18 

DAN CURT IN 

California Conference of Carpenters 18 

ART CARTER 

California Pipe Trades Council 

State Association of Electrical Workers 18 

JOANNE McNAB 

Women' s Appointment Project 19 

Committee Action 19 



VI 



LON S. HATAMIYA, Secretary 

Trade and Commerce Agency 19 

Introduction and Support by 

SENATOR TIM LESLIE 19 

Support by SENATOR JOHN VASCONCELLOS 21 

Questions by CHAIRMAN BURTON re: 

Any Foreseeable Y2K Glitches 22 

Background and Experience 22 

Questions by SENATOR LEWIS re: 

Federal Background Experience that 

Might Help in New Position 25 

Review of Trade Offices 26 

Questions by SENATOR HUGHES re: 

Small Business Loan Guaranty Program 27 

Infrastructure and Economic 

Development Bank 28 

Questions by SENATOR BACA re: 

Plans to Strengthen State's Efforts 

To Promote Trade and Increase 

Investment in California by Foreign 

Corporations 29 

Need for More Awareness of State 

Financial Assistance or Technical 

Assistance Programs 30 

Questions by SENATOR KNIGHT re: 

Aerospace Industry in California 31 

Closing Supportive Statements by 

SENATOR JOHN VASCONCELLOS 33 



-J 



VI 1 



Witness in Support: 

CHRIS MICHELI 

Semiconductor Equipment & Materials International 

Lockheed Martin Missiles and Space 34 

Motion to Confirm 34 

Committee Action 35 

Termination of Proceedings 35 

Certificate of Reporter 36 



P-R-O-C-E-E-D-I-N-G-S 
— 00O00 — 

CHAIRMAN BURTON: The gubernatorial appointees, 
first one, Aileen Adams, Secretary, State and Consumer Services 
Agency . 

SENATOR JOHNSTON: Thank you, Mr. Chairman and 
Members . 

I wanted to introduce formally to you Aileen 
Adams, who has been appointed by the Governor as the Secretary 
of the State Consumer Services Agency. She is uniquely well 
qualified for this, as I think her background materials will 
indicate, as those of you who, perhaps, don't know her 
personally will learn in this hearing, and in the months and 
years ahead. 

Her background on behalf of victims of crimes, 
and running a substantial federal program, as well as her 
services as Fire Commissioner in Los Angeles, Deputy City 
Attorney, involvement with dozens of nonprofit associations, and 
her intellect and energy will well serve the State of 
California. 

Aileen and her husband, Geoff, were the owners of 
the Stockton Port, so I have first-hand knowledge of their 
capacity to bring home a winning team to Stockton, California, a 
farm club of the American League Milwaukee Brewers, Senator 
Lewis. 

I present to you Aileen Adams. 

MS. ADAMS: Good morning. 

Can I make a brief opening remark? 



CHAIRMAN BURTON: Certainly. 

MS. ADAMS: I just want to begin by thanking 
Senator Johnston. I think no one has a higher batting average 
for his constituents than Senator Johnston. And I know he's 
supposed to be in three or four different places this morning, 
and I appreciate his taking the time to be here. 

Let me just make a couple of brief remarks. I 
know you appreciate brevity. 

I literally cannot imagine having a more 
wonderful job, and it's not because of the dazzling numbers that 
characterize our Agency, which has one of the broadest 
portfolios in government, with 15,000 employees, a $1.3 billion 
operating budget, $4 billion in procurement, $22 billion in tax 
collection, and 12 departments that oversee civil rights 
enforcement and consumer protection, as well as recruiting state 
employees, collecting taxes, and building state offices. 

It's not the impressive numbers that I think of 
when I think of the State Consumer Services Agency. It's 
people. People like the 80-year old disabled couple who can't 
continue to live in their own home because of shoddy work by a 
contractor who's indifferent to their declining health. 

People like the African-American man, harassed 
every day at work, forced to see inflammatory racial epithets 
written on the walls that remained there literally for months. 

Children like the 700 kids in South Central Los 
Angeles who are not able to attend a state-of-the-art science 
center school because of inexcusable bureaucratic delays, which 
Senator Hughes and I are working to remove. 



Children who are not receiving needed therapy 
after their father's beaten their mother in their cowering 
presence . 

Whether it's through the Fair Employment and 
Housing Department, Consumer Affairs, the Victim Compensation 
Program, the Office of Public School Construction in DGS, the 
Personnel Board, or any of our other departments, this is truly 
a job which, in very significant and fundamental ways, touches 
the lives of virtually every Calif ornian. 

My greatest challenge, and I'll conclude shortly, 
is to give our diverse customers, our tax payers, job 
applicants, crime victims, consumers, and businesses alike, a 
system that treats them fairly and one that really values their 
voice. In the many different jobs that I've held, every law 
that I've advocated for, every policy reform that I've 
initiated, each one had the same beginning: the voice of 
someone who had not been treated fairly by the system, the voice 
of someone who had the courage to come forward to take a stand. 

I intend to open the doors of this Agency in 
every way that I can to these voices. 

Finally, besides listening, I believe strongly in 
collaboration and coordination. Working closely with other 
governmental agencies, the private sector, and community groups 
helps to make government, I think, much more effective and 
efficient. 

Going back to the baseball analogy, I will 
continually stress as a manager a team approach to problem 
solving, which most certainly includes Legislators. 



I thank you for considering my nomination. I 
will always be grateful to the Governor for having the 
confidence in me to head the State and Consumer Services Agency, 
and I look forward to a very close working relationship with all 
of you, and hope that I can respond to your questions 
satisfactorily. 

If I could take just one more moment, I would 
like to introduce my fabulous husband, who just flew in from Los 
Angeles. He's Geoffrey Cowan. He's Dean of the Annenberg School 
at USC. I know there's at least one Trojan on this panel, and 
one strong supporter of Trojans. 

SENATOR BACA: We're not going to hold that 
against them. Some of us went to UCLA. 

SENATOR JOHNSTON: You gain, one lose one. 

MS. ADAMS: I guess I can share with you, since 
it's St. Patrick's Day, that Geoff is my true Shamrock, my 
four-leaf clover, and he's seated in the second row there. 

CHAIRMAN BURTON: A couple questions. One is 
that under the last administration, whenever there was anything, 
any bills proposed for licensure of certain professions — some 
of which are there to protect those in and make sure somebody 
else can't get in business, and the others are there to make 
sure that people that perform these services to the public are 
qualified to do it — but in every event that I can recall, the 
Department of Consumer Affairs opposed them, reflecting, I 
guess, the philosophy of the Wilson administration, that no 
regulation and no licensure, I guess, was the best. 

I would just hope that the Agency under you would 



take a look at each individually. And if they have merit for 
the protection of the public, that you would look favorably upon 
them. And if they didn't, then you'd speak up. 

But it was just a total philosophical opposition 
to any licensure, or requirements, or whatever. 

Lastly for me, do you know what the status is of 
the Agency in the Y2K problem? 

MS. ADAMS: Yes. All of the agencies and 
departments under me are meeting their guidelines in terms of 
Y2K compliance. 

CHAIRMAN BURTON: They'll all be ready? 

MS. ADAMS: We'll all be ready. That is a top 
priority of the Governor. We will all be ready. 

CHAIRMAN BURTON: Senator Lewis. 

MS. ADAMS: Good morning, Senator. 

SENATOR LEWIS: Good morning, and good to see you 
again. 

MS. ADAMS: Nice to see you. 

SENATOR LEWIS: Senator Johnston hurt a little 
bit by mentioning the Milwaukee Brewers, but you did nicely with 
use. 

[ Laughter . ] 

MS. ADAMS: We had the best win-loss record in 
all of professional baseball. 

CHAIRMAN BURTON: I'd just like to say that I was 
raised in Milwaukee, and we had a Minor League team, the 
Milwaukee Brewers. And it wasn't until about ten years ago that 
it dawned on me what Brewers stood for. I swear to God, we just 



grew up with the Brewers there. And finally it dawned on me it 
was for those who brew beer. 

I thought I'd share that with everybody. 
[ Laughter . ] 

CHAIRMAN BURTON: Please continue, John. 

SENATOR LEWIS: I will. 

MS. ADAMS: This is a line of questioning I'm not 
prepared for. 

SENATOR LEWIS: I did have a question. There's 
been at least a little bit of confusion, maybe most of the 
confusion's on my part, relative to the new administration's 
policy about directing business to union-only establishments. 

Since you're the Secretary in charge of 
overseeing the Department of General Services, what's going to 
be your position relative to that as a policy, versus trying to 
get the most bang for taxpayers' dollars? 

MS. ADAMS: I appreciate the question, and I know 
there is some confusion because of a memo that went out in 
another agency. And that memo has subsequently been clarified. 

In the Department of General Services, our 
mandate is to follow the law, and we'll do that. But that also 
means certainly accepting bids, looking at bids from union 
contractors, but then determining who gets the bid based on the 
lowest estimate. 

SENATOR LEWIS: Apparently there was a budget 
augmentation for creating some additional staff for the 
Franchise Tax Board, I think it was additional auditors in this 
year's proposed budget. But apparently that was despite there 



was objections from the Franchise Tax Board. And also, 
apparently there was a prior audit, I believe by Deloitte 
Touche, that suggested they were over staffed to begin with. 

What's your thought on all this? 

MS. ADAMS: That's something that we're looking 
very closely at. That audit is interesting to read because 
basically it says that the Franchise Tax Board is doing a 
fantastic job in its core competencies. 

But there are two areas of concern that we're 
looking at. One is the proposal to reduce supervisors vis-a-vis 
their employees, to reduce the span of control. 

The other is to reduce the staff by about 417 
people. 

We want to make sure, in looking at these 
proposals, and the Department of Finance is also looking very 
closely at this, since the Franchise Tax Board does generate 60 
percent of our budget, $22 billion, we want to make sure that by 
reducing the numbers, we're not impacting the amount of revenue 
that's brought in for the state. 

So, those two items in that report are especially 
under review at this time by our Agency and also by the 
Department of Finance. 

SENATOR LEWIS: Lastly, what are your thoughts 
relative to the talk we have occasionally, or every year, about 
whether or not we should merge the Franchise Tax Board and Board 
of Equalization? 

MS. ADAMS: That's something I know that's been a 
subject of study for a long time, including two Little Hoover 



8 

Commission reports, one in 1964 and one in the mid-80s. 

From what I understand from those reports, 
there's been no indication that a merger would either save money 
or produce more revenue from the state. 

But I think we should always be open to 
streamlining government. It's something I'm happy to take a 
look at. And it's very important to me to have a close working 
relationship with the Board of Control, Franchise Tax Board 
staff, and to represent their issues fairly and compellingly to 
the Governor. 

SENATOR LEWIS: If there should be some kind of a 
merger, then whatever kind of new board is as a result of that, 
do you think they should be elected or appointed? 

MS. ADAMS: I really couldn't respond to that at 
this time. That would be something that we would have to 
review, develop options on for the Governor, and he would make 
that policy decision. 

CHAIRMAN BURTON: One question before Senator 
Hughes . 

Where did the reduction of how many people at 
Franchise Tax — 

MS. ADAMS: Four hundred seventeen. 

CHAIRMAN BURTON: Who asked for that? 

MS. ADAMS: The Franchise Tax Board. 

CHAIRMAN BURTON: Who is the Franchise Tax Board? 

MS. ADAMS: At the time — it's now different; 
one different person. 

CHAIRMAN BURTON: Andel and who else? 



MS. ADAMS: It was Andel, Connell, and the head 
of the Department of Finance. 

CHAIRMAN BURTON: So, what they would want to do 
is take the only money-making branch of government and reduce 
its ability to function? 

MS. ADAMS: We're reviewing it, as I said, very 
closely, that proposal. 

CHAIRMAN BURTON: I would think. 

Senator Hughes. 

MS. ADAMS: Good morning. 

SENATOR HUGHES: Good morning. Thank you very 
much. 

I think you and I have gotten to know each other 
fairly well over the last month or so, because I had a special 
situation that I was interested in, and if I might ask you to 
display to the Members how you approached this problem. 

There was a space saver school that was designed 
for Exposition Park way back when I represented that district. 
It was some nine years ago that the plans were approved and the 
State Allocation Board allocated the money, and nothing moved. 
Nothing happened until I came to see you. 

Would you please tell the Committee what the 
problem was, and what the problem is now, and some of the ways 
that we're seeking to solve it? It's just one small example of 
the complexity of becoming a Secretary of a large agency that 
has many departments under it. 

MS. ADAMS: Well, as you get to know me better, 
you'll learn that I have no patience for bureaucracy. This 



10 

case, I think, was a very good example. 

We have a state-of-the-art science center school 
that Teresa Hughes has worked very hard for the past nine years, 
and it's still not under construction. And the reason is, 
there's been a complete lack of coordination between the 
Superintendent of Schools. FEMA's involved because part of the 
project is a historic building that needs to be renovated. 
There are five or six different state and federal entities 
involved in this. 

And when Senator Hughes brought this problem to 
me, I said, "Let's sit down. Let's get all the people together, 
set a time frame, set goals, and together figure out how we're 
going to move this project forward." 

And that's exactly what we did two weeks ago in 
Los Angeles. We had the Superintendent of Schools there, the 
head of Public School Construction in DGS, representatives from 
other governmental agencies, and we set goals and time lines so 
that we can move this forward. 

As part of this sloppy past process — and this 
was the thing, I think, that irritated us the most — the $22 
million that had been set aside for this very important project, 
which one day will be a national model for the country, had been 
lost because the proper paperwork had not been filed. So, we're 
working very closely with Senator Hughes to make sure that that 
money's recouped, and that we get this project going. 

SENATOR HUGHES: So, I have empathy for any 
Agency Secretary coming into power who has to clean up the mess 
that they are left with, and I appreciate you for that. 



11 

I'm going to ask you another question that may 
not be quite as easy for you to answer. 

In the wake of 209, will the State Personnel 
Board continue to collect and publish data showing the ratios of 
women and minorities in State Civil Service? And what will you 
do about it, if anything? 

MS. ADAMS: Proposition 209 has impacted the 
collection of statistics in the Department of General Services. 

It has not impacted the practices in the 
Personnel Board. They continue to collect these important 
statistics. Each department under Civil Service statutes, which 
were upheld as being Constitutional in a court ruling, a 
Superior Court ruling, has an affirmative action officer. Those 
officers look at the hiring practices. They compare the 
statistics to those in the workforce to those relevant members 
of the workforce. If there' re problems, they do set goals, and 
they continue to practice as they always have. That's under a 
court decision. 

SENATOR HUGHES: All right. 

Are you familiar with the State Auditor's 1997 
report criticizing the management practices of DFEH? 

MS. ADAMS: Yes, I am. 

SENATOR HUGHES: What steps are you taking to 
rectify? 

MS. ADAMS: Steps have been taken to rectify the 
problems there, the greatest problem being that in 30 percent of 
their cases, they weren't meeting the 365-day timeline. That 30 
percent, because of increased funding, and staffing, and 



12 

reorganization, and increased effective use of computers, has 
now been reduced to one percent. And they've set up a three, 
six, nine program so that everybody who works on these cases has 
certain deadlines they have to meet. And their goal is actually 
not 3 65 days now, but 270 days to finish these cases. 

I think they've made substantial progress. 
There's still more work that needs to be done there, and I will 
keep my eye very closely on it to make sure that those deadlines 
are met. 

SENATOR HUGHES: Thank you. 

CHAIRMAN BURTON: Senator Baca. 

SENATOR BACA: Thank you. 

Aileen, thank you very much for answering the 
last guest ion, because that was one of the guestions that I had. 
One of the concerns that we have is that when someone filed a 
complaint with the Fair Political Practices Commission, we'd 
like it to at least respond within 30 days, so I do appreciate 
the action that you're taking there. 

One of the other questions that I'd like to 
follow up is on the State Personnel Board. The State Board is 
required to enforce the State Civil Service laws. These laws 
reguire employment decisions to be made on the basis of job 
gualif ications . 

What kind of effort do you make to ensure that 
all gualif ied candidates, and I state all gualif ied candidates, 
including minorities and women, are notified of job 
opportunities? 

MS. ADAMS: I've discussed the importance of 



13 

outreach programs. And we're working with all departments to 
increase our outreach efforts. We've had programs already this 
year at 40 different state fairs. 

We also need to identify populations that we're 
not reaching. For example, Hispanics. Latinos represent only 
about 20 percent, less than that actually, of the workforce. I 
think it's 18.2 percent of the workforce, and yet, they're 30 
percent or more of our population. 

So, we need to target outreach programs to Latino 
events, to newspapers and magazines and media which will reach 
those populations. And I intend to be very active in ensuring 
that our outreach programs are effective. 

SENATOR BACA: Thank you. I appreciate those 
efforts. 

The other one is on contracting out. It'll be 
the opposite of what was asked by Senator Lewis. 

Under previous administrations, private firms 
were contracted for building maintenance services. 

MS. ADAMS: Right. 

SENATOR BACA: Do you plan to use outside 
contractors for maintenance services that are the responsibility 
of the Department of General Services, or what are your plans 
here? 

MS. ADAMS: As you know, General Services is in 
charge of janitorial services in state buildings. Today, they 
respond in three different ways. They sometimes use permanent 
state employees, Civil Service employees. Sometimes they use 
permanent- intermittent employees. And other times they use 



14 

contract employees. They contract out. 

I have asked the head of the Department of 
General Services to review these practices, which in the past 
few years has tended to be more in the contracting out area, and 
to present us with options that we can take to the Governor to 
review. 

SENATOR BACA: Thank you. 

CHAIRMAN BURTON: Senator Knight. 

SENATOR KNIGHT: Thank you, Mr. Chairman. 

Aileen, you had mentioned before the fact that 
you didn't have much patience for bureaucracies. 

MS. ADAMS: Not when they get in the way of a 
school and other things happening. 

SENATOR KNIGHT: Could you elaborate on that a 
little bit, since you have oversight of some of the biggest 
bureaucracies in the state? 

MS. ADAMS: I guess, you know, because of my lack 
of patience, and the school was a good example, I just tend to 
be very hands-on. I get on the phone and call the person myself 
and say, "Why isn't this happening?" You know, and I expect 
them to be accountable. 

And I also will really emphasize bringing people 
together. I think one of the greatest problems that I've seen 
in government is, the left hand doesn't talk with the right 
hand. You know, we see that in the Capitol Development 
Project. There's a lot of concern. It's been expressed at two 
legislative hearings about the greening of the Capitol 
Development Project, which is a $4 00 million project that's 



15 

going to affect all of us. 

Well, these issues should have been discussed at 
the beginning, you know. The Department of General Services, in 
my opinion, should have been meeting with the Energy Commission 
and the Waste Management Board, and the other people who have a 
point of view. It's not that they would all agree, but these 
other agencies have ideas and resources. 

And I really do think that we should try, to the 
extent that we can in government, to function as a team. I 
think it cuts down on the bureaucracy. 

CHAIRMAN BURTON: Just a comment on what you 
said about the GSA and Capitol Development. 

We had a project in San Francisco where they 
re-built the bridge I know. We had to seismically retrofit the 
old State Building and totally re-build the annex. And they 
paid no attention, the GSA paid absolutely no attention to the 
local community, to anything else. And only by virtue of the 
fact that I got involved, and at that time the Speaker was 
running for Mayor that he decided to get involved because it was 
of great concern to the community, were we able to force them 
into a less intrusive design to take care of wind tunnel 
problems, to get a little bit more open space in the design, not 
on the ground, and do certain things. 

And basically, if whatever agency it is was 
forced to deal with people at the beginning, like you say, they 
don't necessarily have to follow the input, but if they get the 
input, then it's just a lot easier. 

MS. ADAMS: Exactly. 



16 

CHAIRMAN BURTON: We literally had to threaten 
them with pulling the funds back to make them do certain things. 
And that really would not have happened without the support of 
the Speaker at that time, who would not have been that forceful, 
in my judgement, were he not looking elsewhere, because it was 
in my district, and it was a concern to me. It wasn't of that 
much concern to him until my district became all part of his 
domain. So, I think that that's very helpful. 

MS. ADAMS: The East End Project, we've been very 
fortunate to have Senator Johnston so involved and really 
playing a leadership role in that. And I think because of his 
leadership, it will be everything that we want it to be. 

CHAIRMAN BURTON: One that we can all be proud 
of. 

As long as we're in the projects, how about that 
Franchise Tax Building? Are we for that or against it? 

SENATOR JOHNSTON: We're for that. 

CHAIRMAN BURTON: Okay. We expect to see that 
happen. And we don't expect to see those people over there 
messing around with it. We can send that message back. 

SENATOR JOHNSTON: Chairman Klehs will take care 
of it. 

SENATOR HUGHES I'd like to move it. 

CHAIRMAN BURTON: Moved by Senator Hughes. 

Could we have a show of hands of the people in 
support? Is anybody compelled to comment? You're compelled to 



comment? 



MS. FARMAN: I am, your Honor. 



17 

Mr. Chairman and Members, I'll move quickly. 
Mr. Chairman and Members of the Committee, I'm Catherine Farman, 
and I've been asked to appear here on behalf of the Rape 
Treatment Center at UCLA Medical Center, Santa Monica Hospital. 

The Rape Treatment Center is pleased to support 
the nomination — 

SENATOR BACA: What institution is that from? 
Is that from UCLA 

[ Laughter ] 

MS. FARMAN: Yes, UCLA Medical Center, both sides 



covered . 



testify? 



CHAIRMAN BURTON: That's why you're compelled to 



[ Laughter . ] 

MS. FARMAN: Yes, I am. And I'm a UCLA grad, so 
I wanted to make sure UCLA was adequately represented here. 

The Rape Treatment Center is pleased to support 
the nomination of Aileen Adams. Through her work at the Rape 
Treatment Center, and throughout her career, Aileen has shown 
herself to be a dedicated and gifted public servant. 

Thank you. 

CHAIRMAN BURTON: Why don't we just have 
everybody line up, give us the name of the organization and 
announce your support, please. 

Let me just tell everybody a story. One time we 
had a nomination going through like this. And by the time 
everybody got through supporting her, somebody came in with a 
damning FBI report. 



18 

[Laughter. ] 

CHAIRMAN BURTON: Just a piece of history. 

MS. ENGLISH: My name is Sharon English. I'm 
here as a private citizen. I do national training on crime 
victims, and I just want to vouch for Aileen's national 
reputation as being a hard worker, innovative, and somebody who 
brings people together. And I support her. confirmation. 

CHAIRMAN BURTON: Next, sir. 

MR. SNYDER: Harry Snyder, Consumers Union. 

We're pleased to have Aileen Adams as the next 
Secretary of State and Consumer Services, an organization that 
we work with often, and who is important in representing the 
average Calif ornian in the Cabinet decisions of the Governor. 

Good luck. 

MS. BROWNSEY: Good morning. Donne Brownsey 
representing the California Nurses Association. 

We're very pleased to be here today to support 
Aileen's confirmation, and know that she will be a true patient 
advocate. 

Thank you. 

MR. CURTIN: Senator, Members of the Committee, 
Danny Curtin. I'm with the FBI. 

[ Laughter . ] 

MR. CURTIN: The California Conference of 
Carpenters, we obviously want to add our support and hope you 
will move forward. 

Thank you. 

MR. CARTER: I tried to cut that guy off. 



19 

Art Carter with the California Pipe Trades 
Council and the State Association of Electrical Workers. 
Pleased to support. 

MS. McNAB: Joanne McNab with the Women's 
Appointment Project. We strongly endorse Aileen's candidacy. 

CHAIRMAN BURTON: Any opposition? 

Moved by Senator Hughes. Call the roll. 

SECRETARY WEBB: Senator Baca. 

SENATOR BACA: Aye. 

SECRETARY WEBB: Baca Aye. Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Five to zero. 

CHAIRMAN BURTON: Congratulations. 

MS. ADAMS: Thank you very much. Thank you. I 
look forward to working with all of you. 

CHAIRMAN BURTON: Lon Hatamiya, and Senators 
Leslie and Vasconcellos. 

SENATOR LESLIE: Mr. Chairman and Members, it's a 
pleasure to be here today to introduce and recommend Lon 
Hatamiya for the position of Trade and Commerce Agency Secretary 
of California. 

I think he asked me to introduce him because he's 



20 

from the Marysville area, which is in my district, or perhaps 
because you've seen fit to have me be Chairman of the Finance, 
Investment and International Trade Committee. 

In the capacity of being Chairman of the 
Committee, I had a lengthy meeting with Lon and came away very 
impressed not only by his resume and his experience and 
background, which is extremely well suited for the position, but 
also his willingness to work with the Legislature, the 
Committee, Democrats and Republicans, to meet the goals of the 
Department and also of the Committee. So, I was very pleased to 
be able to come here and recommend him. 

He has experience also, which is important to me, 
in the area of rural issues as well as urban. He understands 
rural California and urban California. 

He's had extensive involvement at both the state 
level and at the national level. I'm relating specifically to 
the duties that will be reguired. I noted in the bio. that in 
the Clinton administration, he was responsible for administering 
a world-wide agency of nearly a thousand employees, including 
200 foreign service offices. 

I'm very interested in the Offices of Trade for 
California, how we select them, are they doing their job well, 
gualif ications of our representatives in those offices, and Lon 
is also interested in that and is involved in a full review of 
the operation to determine their value and where we should or 
should not have these offices. 

So, all in all, I say he gets a way better than 
passing grade. There are a couple things that, in his past, 



21 

he's had involvement in that I'm not involved in, or wouldn't 
cause my support. For example, he also went to UCLA, while I 
went to USC, and he has been active in the Planned Parenthood 
Organization, but that certainly has nothing to do with the 
duties of this office, and I'm proud to recommend him for 
appointment. 

CHAIRMAN BURTON: How about the fact he was on the 
Butte County Democratic Central Committee? Does that give you 
pause? 

SENATOR LESLIE: But he ran against Bernie 
Richter . 

[ Laughter . ] 

CHAIRMAN BURTON: Senator Vasconcellos. 

SENATOR VASCONCELLOS: Thank you. 

Senators , I ' ve known Lon Hatamiya for ten years . 
We won't find a more talented person of integrity to hold this 
job, no matter where we search. He's got credentials: 
undergrad, Harvard; law school, UCLA. He's worked in 
Washington. He's from the rural part of California and has a 
good mind, a good heart, and absolute integrity. You can trust 
him with your life and never, never blink twice. 

I brought him last Friday to Silicon Valley for 
his first out-of-the-Capitol all day tour. We did 13 hours, 
non-stop meetings with high tech leaders, plant visits, ethnic 
minority chambers. And the best testimony of how he was that 
day, besides my own personal delight in seeing him show himself 
with respect and talent, was, KCBS interviewed him. The 
broadcast was, "Secretary Hatamiya came to the Silicon Valley 



22 

and made friends everywhere he went." When a man can do that in 
high tech, which is California's center of prosperity, he's a 
good Secretary candidate. 

I urge your approval of him. 

CHAIRMAN BURTON: Thank you. 

Just a couple questions on the computer problem, 
Year 2000, are the departments under your Agency going to be 
pretty well ready to go, or any glitches you foresee in that? 

MR. HATAMIYA: We are prepared to address all of 
the Y2K issues. I think as my colleague, Secretary Adams has 
stated, we're still under review, but I think we're well under 
way, and we'll meet the needs for 2000. 

If I could, I have had a prepared statement that 
I'd like to address. 

First of all, I'd like to thank Senator Leslie 
and Senator Vasconcellos, certainly two people I have great 
esteem and certainly respect for. I appreciate their support 
today, and it's really an honor to be before you. 

Mr. Chairman and Members of the Senate Rules 
Committee, thank you again for the opportunity to appear before 
this distinguished Committee for consideration of my 
confirmation as Secretary of Trade and Commerce for the State of 
California. 

Mr. Chairman and Members, let me also thank you 
for your fine leadership for our great state. 

I'm sure that all of you would agree that there's 
no greater honor than public service. Let me assure you that in 
addition to appearing before you today, there is no greater 



23 

personal honor than to serve Governor Gray Davis and the people 
of my home state of California in this capacity. 

If I may, I'd like to introduce my mother and 
father, Kashiwa and George Hatamiya of Marysville, and to thank 
them for their lifelong support and encouragement. And also my 
sister and her children, Jill, Sarah, and Sam Esser from San 
Francisco. 

By the way, they live in your district, Senator. 

Unfortunately and to my dismay, my wife Nancy, 
who many of you know from her previous service in the State 
Assembly as the Chief of Staff to John Vasconcellos, and my 
sons, John and George, could not be with me today, since they're 
finishing the school year in Washington, D.C. This is really to 
my dismay, because they're my strong backbone of support. 
Without the continued dedicated support and sacrifice of my wife 
and sons, I would not be able to be before you today. I do 
really want to thank them for that. 

When Governor Davis invited me to join his 
Cabinet, I was humbled by the tremendous opportunity to help 
lead the world's seventh largest economy into the 21st Century. 
In this role, I will have the enormous challenge of creating and 
retaining jobs, implementing new economic development 
strategies, working with the diverse industry clusters that 
stretch across the various regions of this state, and meeting 
the needs of the increasingly global marketplace. 

However, with the support of the Governor, the 
State Legislature, and the many stakeholders and constituencies 
we serve, I believe that I am best prepared to meet these 



24 

challenges and lead the Trade and Commerce Agency into the next 
millennium. 

I will best meet these challenges by relying upon 
my professional experiences. Having worked in the private 
sector for both large and are small corporations, having worked 
in the public sector, administering large federal agencies, and 
having negotiated major international trade agreements in 
numerous venues, including Asia, Latin America, the European 
Union, Mexico, Canada, and the World Trade Organization, gives 
me the appropriate background to address the diverse issues that 
face the Trade and Commerce Agency. 

I have begun my tenure, as Senator Vasconcellos 
has mentioned, by engaging in a thorough review of the Agency's 
programs, personnel, offices, and organization. I have also 
spent the last eight weeks traveling across the state in an 
ongoing effort to solicit input and recommendations from as many 
people, businesses and organizations as possible impacted by the 
delivery of our programs. My interest lies solely in 
determining what works well at Trade and Commerce, and how we 
can improve our effectiveness, efficiency, and responsiveness. 
I will depend upon the dedicated career public servants in the 
Agency to assist me in this vital process. 

I shall look to you and your fellow Members of 
the State Legislature to provide the necessary guidance and 
expertise as I engage in the Agency's review. Once I have 
completed the comprehensive review, I will analyze my findings 
and make recommendations to the Governor and to the Legislature 
where improvements are needed and where changes can and should 



25 

be made. 

However, taking the lead of the findings of the 
Economic Strategy Panel, the evaluative process will continue as 
we attempt to make state government more flexible, agile, 
customer-driven, facilitative, decentralized and networked. 

The scope and purview of the Trade and Commerce 
Agency is broad, and it is the one state agency whose programs 
transcend foreign borders. Therefore, you have my full 
commitment to build upon a public-private partnership to ensure 
that California continues to be a leader in the global economy 
of the 21st Century. 

I humbly seek your support so we can work 
together to improve the quality of live for all Calif ornians, 
and achieve sustainable economic growth. 

Let me thank you once again for the honor to 
appear before you today. 

CHAIRMAN BURTON: Senator Lewis. 

SENATOR LEWIS: Good morning, Mr. Secretary. 

In your capacity, working at the USDA, I was 
wondering now that you've been working at this for a couple of 
months, what kind of programs or things of the US government 
that you're particularly familiar with in terms of increasing 
trade, what kind of things did you learn there might you bring 
with you to your position here now? 

MR. HATAMIYA: I think, as Senator Leslie said in 
my introduction, I had the great honor of overseeing the Foreign 
Agricultural Service at USDA, overseeing the nearly 80 foreign 
offices around the world. 



26 

One of the things that we can do at the state is 
really tap into the resources of those offices and embassies. I 
think one of the critical mistakes we've made is not take 
advantage of the advocacy and really the sales people that we 
have in those embassies to represent California. So, I'd like 
to take the nine offices we currently have, to work more jointly 
with the US offices, the Trade Development Offices in many of 
those countries, to assist California. 

California is the largest exporting state in the 
country. As I mentioned, we're the seventh largest economy. I 
told John and many of his constituents on Friday, I'd like to 
make it the sixth largest economy in the world. 

So, I think we can build upon the programs I 
administered at the federal level, also work with some of the 
colleagues that I developed there, to make our programs work 
better not only in the state, but world-wide. 

SENATOR LEWIS: With regard to the Trade Offices, 
the nine that we have and the four additional ones that have 
been approved, in terms of assessing the relative value of each, 
is there a particular Trade Office that we might presently have, 
versus a country or region that we don't have right now, that 
you might want to be looking at? 

MR. HATAMIYA: That's an assessment we're making 
now, whether the nine offices are in the most appropriate 
locations they need to be for long-term benefits to the State of 
California. 

Naturally, we're already part of Latin America, 
California, because of our shared culture, history, language. 



27 

We're also part of the Pacific Rim. 

In my tenure, I'd like to take a focus, both at 
Latin America and the Pacific Rim. I know the Governor's trip 
about a month ago to Mexico is the first step in that direction. 
I had the great pleasure of accompanying him there. And I think 
we can rebuild our opportunities in Mexico and other countries 
in South America. 

But I think we can focus in and do a better job 
than we have in the past. 

SENATOR LEWIS: Thanks. 

CHAIRMAN BURTON: Senator Hughes. 

SENATOR HUGHES: Thank you very much. It's nice 
seeing you again. 

I had one of the best airplane trips from Los 
Angeles to Sacramento riding with you, so I've asked you a lot 
of questions and gotten to know you better. 

I am very, very impressed by your extensive 
experience and your broad range of knowledge in this area. 

I'd like to know, in your opinion, do you think 
there is a need no expand and financially enhance California's 
Small Business Loan Guaranty Program? What are your plans for 
small businesses? 

MR. HATAMIYA: Senator Hughes, it's a very good 
question. 

Previously, being a small business owner myself, 
I'm very committed to ensuring that the best services are 
provided. 

But I also am realistic. We are dealing with 



28 

finite resources at the state level, and that's one of the 
reasons for my extensive review of the programs that I oversee, 
to ensure that we're maximizing our efforts in the utilization 
of those state resources, but to see where we can refocus them. 

As I mentioned, the Economic Strategy Panel has 
put forth recommendations, looking at various industry and 
regional clusters. 

I think we need to better focus the efforts we 
have in the Agency, and one of my priorities is small and medium 
sized businesses, both in the rural and urban areas. I think 
that there • s an untapped opportunity for us to expand exporting 
from those, from that segment. And I will focus in on that, and 
you have my commitment to do that. 

SENATOR HUGHES: Thank you. 

What steps, if any, will your Agency or its 
representatives make to implement an innovative and strategic 
approach to ensure that the newly combined Infrastructure and 
Economic Development Bank will support both infrastructure 
projects and private sector economic development? 

MR. HATAMIYA: I've currently instructed my staff 
to put together guidelines that can be standardized, that 
applicants to the Bank can utilize, of what priorities should be 
given for specific projects. We will focus in on where the need 
is the greatest. 

Infrastructure development is far reaching in 
this state. We have need to focus in on assisting those that 
have no other alternative. With a full capitalization of that 
Bank, I think we have a tremendous opportunity to do that. 



29 

SENATOR HUGHES: Thank you. 

CHAIRMAN BURTON: Senator Baca. 

SENATOR BACA: A little follow up and a little 
comment. First of all, I do appreciate the fact that you went 
with the Governor to Mexico, and that was one of the beginnings 
of opening relationships between Mexico and what needs to be 
done in reference to trade in that particular area. 

But as I look at international trade and 
investment, do you have any plans to strengthen the state's 
efforts to promote trade and to increase investment in 
California by foreign corporations? 

MR. HATAMIYA: Absolutely. I've already, in my 
eight -week tenure in the position, I've had the chance to meet 
with the Councilor Corps here in California. I want to work 
very closely with foreign investors to take a look at where we 
have opportunities in this state. 

I think we can open our doors. I'm going to 
utilize my international contacts to ensure also that we can 
reach out to many other countries, and we also put appropriately 
people into our foreign offices that really can be sales people, 
that can sell California as a destination for foreign 
investment, as well as sell our export products in those various 
regions of the world. 

So, I'm very committed to that and will build, 
hopefully build upon the experience I've had in the past. 

SENATOR BACA: Thank you. 

One other comment, I do appreciate your 
responding to Senator Hughes' question about the Small Business 



30 

Development Corporation, and the need to expand and look at 
rural areas like the Inland Empire and others that are growing 
communities. I'm glad you addressed that as well as an 
important need. 

The other that I feel is very important is, I 
feel that a lot of business owners or managers have complained 
that they're not aware of the state programs offering financial 
assistance or technical assistance, or other services. 

What do you plan to improve this awareness or 
communications with them? 

MR. HATAMIYA: Well, again, I think that that is 
based upon education and outreach. 

I concur with the previous confirmation hearing 
with Secretary Adams, we have to do a better job of outreach and 
education of those that can benefit from our programs. And 
that's why I'm going to take a look at the structure of our 
regional offices, the structure of our divisions within the 
Agency, to determine where we can better educate people. 

With the eye-opening experience in Silicon Valley 
on Friday with Senator Vasconcellos, we have a tremendous 
opportunity to share information over the Internet, the 
Information Exchange Age is — we're the leader in the State of 
California. So, the state should really take advantage of that, 
of how they can share that. 

I talked with some small business leaders earlier 
this week, and they were mentioning, their membership, only 30 
percent has access to computers or access to the Internet. So, 
we need to build upon that opportunity as well as to better 



31 

educate . 

Let me also end by saying that I'm very proud of 
my UCLA background. I have two degrees from UCLA. 

[ Laughter . ] 

SENATOR BACA: Thank you. 

CHAIRMAN BURTON: Anybody here from Northern 
California. 

[ Laughter . ] 

MR. HATAMIYA: I grew up in Marysville, so I'm 
from Northern California. I just went to UCLA. 

CHAIRMAN BURTON: Senator Knight. 

SENATOR KNIGHT: Thank you, Mr. Chairman. 

We have a talked a lot about foreign trade, 
tourism, the film industry, all of those things going on in 
California. 

There's another industry. It has to do with 
space. It's a trillion dollar industry. California doesn't 
appear to be interested in securing any portion of that, because 
they don't appear to be competitive with the rest of the states 
around the country. 

Other states are being extremely competitive. 
Florida has a MOU with the Kennedy Space Center to the tune of 
building facilities in support of the reuseable launch vehicles 
that are coming down the road that are going to be competitive 
with the space shuttle and others to reduce the cost of putting 
satellites into space and taking them out of space. 

What are you planning to do in order to secure 
this kind of an industry, and to keep that industry in 



32 

California, and to bring it back? Because, we have lost some of 
those programs. 

MR. HATAMIYA: Senator, I can say the State of 
California, as you well know better than anyone else, has been 
the leader in the aerospace industry. It's been a leader in 
many other segments as well: the high tech, agriculture, across 
the board. 

That • s one of the reasons I mentioned in my 
opening statement the emphasis and reliance upon the Economic 
Strategy Panel's recommendations, which take a look at regional 
and industry clusters. 

One of the things I also mentioned is that I 
think my Agency has tried to spread itself too thin and tried to 
help too many different industry groups, and not help any of 
them too well. 

And I'd like to refocus our efforts and refocus 
our resources, and again, emphasizing the fact that I realize we 
have finite resources, and try to emphasize the areas where we 
are strong. And aerospace is one of those. We have the built 
infrastructure already with the technology, with the personnel. 

And I commit to you, I will do all I can to 
ensure that we refocus our efforts in that area. 

I'll have to rely upon your efforts in the State 
Legislature, again, to give me the resources to do that, but I 
look forward to working with you to see where we can build on 
it. 

It is difficult, and I agree with you, to compete 
with some of the packages that other states are putting 



33 

together, and I think we have to, again, do what we can with 
what we have. 

SENATOR KNIGHT: Let me follow-up just a little 
bit in indicating what other states are doing compared to what 
California is doing. 

California, within the Trade and Commerce 
Department, has established in certain cases Red Teams to 
support various businesses within the state. And they've 
relegated the positions to sub-directors, if you will, in 
various areas to take care of those problems. 

In contrast, other state governors personally are 
calling our businesses and inviting them to come to their states 
to review the packages that they would like to put together to 
entice them to come. 

That's the kind of disparity and level of 
involvement of the states. 

- CHAIRMAN BURTON: I think that the answer to that 
question eliminates the need for an Aerospace Select Committee. 
We've done it all. 

Senator Vasconcellos wanted to make a closing. 

SENATOR VASCONCELLOS: Just a final comment that 
Mexico has become our number one trading partner. 

Beyond that, the entire Pacific Rim is the most 
wealthy market whose flu affects us, and contamination of 
market, and its counter-position, I think, gives us a leg up on 
other states . 

Also, Lon will be the first Asian-American Agency 
Secretary in California history, and it's long overdue. He will 



34 

be a fine one. 

CHAIRMAN BURTON: Witnesses in support. 

MR. MICHELI: Madam [sic] Chair and Members, 
Chris Micheli with Carpenter Snodgrass, here on behalf of 
Semiconductor Equipment and Materials International, a 2,000 
member high tech trade association, headquartered in 
Mountainview, and also Lockheed Martin Missiles and Space. 

Just in brief response on Senator Knight's 
comments, I'd also point out that Secretary Hatamiya, in early 
January, shortly after the swearing in, sat down with Lockheed 
Martin, reviewed the fact that the Governor had proposed in his 
budget a direction to focus on research and development and 
commercial space. And Secretary Hatamiya expressed great 
interest in that and has pursued efforts to learn more about 
those industries so that they can be promoted. 

So, I think that the State of California will do 
a lot in the commercial space sector, and we look forward to 
working with him on it. 

Thank you. 

CHAIRMAN BURTON: Witnesses in opposition? 
Hearing none, Senator Baca moves approval. 

Call the roll. 

SECRETARY WEBB: Senator Baca. 

SENATOR BACA: Aye. 

SECRETARY WEBB: Baca Aye. Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 



35 



SECRETARY WEBB: Knight Aye. Senator Lewis. 
SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 
CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Five to zero. 
CHAIRMAN BURTON: Lon, congratulations. 
MR. HATAMIYA: Thank you. 
[Thereupon this portion of the 
Senate Rules Committee hearing was 
terminated at approximately 10:27 A.M.] 
— 00O00 — 



36 

CERTIFICATE OF SHORTHAND REPORTER 

I, EVELYN J. MIZAK, a Shorthand Reporter of the State 
of California, do hereby certify: 

That I am a disinterested person herein; that the 
foregoing transcript of the Senate Rules Committee hearing was 
reported verbatim in shorthand by me, Evelyn J. Mizak, and 
thereafter transcribed into typewriting. 

I further certify that I am not of counsel or 
attorney for any of the parties to said hearing, nor in any way 
interested in the outcome of said hearing. 

IN WITNESS WHEREOF, I have hereunto set my hand this 

, 1999. 



, IN WITNESS WHEREC 

fl"" day of ^}y)fiyL tJ^ 



AK 
Shorthand Reporter 




5^^y4 1 

VELYN'J. MX2A 
horthand Repo 



368-R 

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HEARING 



SENATE RULES COMMITTEE 

STATE OF CALIFORNIA 




DOCUMENTS DEPT. 



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SAN FRANCISCO 
PUBLIC LIBRARY 



STATE CAPITOL 

ROOM 113 

SACRAMENTO, CALIFORNIA 

WEDNESDAY, MARCH 10, 1999 
9:32 A.M. 



367-R 



SENATE RULES COMMITTEE 
STATE OF CALIFORNIA 



HEARING 



STATE CAPITOL 

ROOM 113 

SACRAMENTO, CALIFORNIA 



WEDNESDAY, MARCH 10, 1999 
9:32 A.M. 



Reported by: 



Evelyn J. Mizak 
Shorthand Reporter 



11 



APPEARANCES 

MEMBERS PRESENT 

SENATOR JOHN BURTON, Chair 

SENATOR JOHN LEWIS, Vice Chair 

SENATOR JOE BACA 

SENATOR TERESA HUGHES 

SENATOR WILLIAM KNIGHT 

STAFF PRESENT 

GREG SCHMIDT, Executive Officer 

PAT WEBB, Committee Secretary 

NETTIE SABELHAUS, Consultant on Governor's Appointments 

WADE TEASDALE, Consultant to SENATOR LEWIS 

FELICE TANENBAUM, Consultant to SENATOR HUGHES 

ANDY PUGNO, Consultant to SENATOR KNIGHT 

MANNY HERNANDEZ, Consultant to SENATOR BACA 

ALSO PRESENT 

MARIA L. CONTRERAS- SWEET, Secretary 
Business, Transportation and Housing Agency 

SENATOR RICHARD POLANCO 

CHRISTINE MINNEHAN 

Western Center on Law and Poverty 

MARC BROWN 
CRLA Foundation 

ART CARTER 

California Pipe Trades Council 

THOMAS SAYLES 
Semper Energy 

CHUCK SUSZKO 

Professional Engineers in California Government 



Ill 



AARON READ 

California Association of Highway Patrolmen 

SENATOR CHUCK CALDERON 

LARRY GOTTLIEB 

Kaufman and Broad Home Corporation 

ROBERT PERNELL 

California State Council of Laborers 

BOB ARNOLD 

California Credit Union League 

SENATOR HILDA SOLIS 

WILLIAM J. LYONS, JR., Secretary 
Department of Food and Agriculture 

SENATOR STEVE PEACE 

SENATOR JIM COSTA 

BILL CAMP 

California Labor Federation, AFL-CIO 

DEE DEE MOSEKIAN 

Women's Appointment Project, CDFA Task Force 

KIRSTIN POWERS 

Agricultural Council of California 

VALERIE NERA 

California Chamber of Commerce 

STEPHEN MACOLA 

California Emergency Food Link 

CATHY SCHMEEK 

National Audubon Society 

DAN TERRY, President 

California Professional Fire Fighters 

KAREN ROSS 

California Association of Winegrape Growers 



IV 

INDEX 

Page 
Proceedings 1 

Governor's Appointees: 

MARIA CONTRERAS-SWEET, Secretary 

Business, Transportation and Housing Agency 1 

Introduction and Support by 

SENATOR RICHARD POLANCO 1 

Background and Experience 2 

Questions by SENATOR LEWIS re: 

Steps to Encourage Businesses to 

Stay or Relocate in California 4 

Bay Bridge Controversy 5 

Cost Overruns 7 

Response by CHAIRMAN BURTON 7 

Position on Statewide Moble Home Rent 

Control 8 

Questions by SENATOR BACA re: 

Commitments to Promoting Diversity 8 

Affordable Housing 10 

Excessive Administrative Costs 11 

Questions by SENATOR HUGHES re: 

HMO Regulation 12 

Motion to Confirm 13 



Questions by CHAIRMAN BURTON re: 

Commitment to Assign Staff to Look into 

Plastic Pipe Controversy 14 

Request to Form Task Force on 

Homeless Issue 15 

Request for Support for Housing Bond 

Legislation for first-time Home Buyers 16 

Witnesses in Support: 

CHRISTINE MINNEHAN 

Western Center on Law and Poverty 16 

MARC BROWN 

CRLA Foundation 17 

ART CARTER 

California Pipe Trades Council 17 

THOMAS SAYLES 

Semper Energy 17 

CHUCK SUSZKO 

Professional Engineers in California Government 17 

AARON READ 

California Association of Highway Patrolmen 17 

SENATOR CHARLES CALDERON 17 

LARRY GOTTLIEB 

Kaufman and Broad Home Corporation 17 

ROBERT PERNELLA 

State Council of Laborers 17 

BOB ARNOLD 

California Credit Union League 17 

SENATOR HILDA SOLIS 18 

Committee Action 19 



VI 



WILLIAM J. LYONS, JR., Secretary 

Department of Food and Agriculture 19 

Introduction and Support by 

SENATOR STEVE PEACE 19 

Background and Experience 21 

Questions by SENATOR BACA re: 

Aid to Workers Hurt by Winter' s Freeze 24 

Questions by SENATOR LEWIS re: 

Position on Milk Standards 25 

Prohibition on Using Milk as 

Loss Leader 26 

Response by CHAIRMAN BURTON 2 6 

Position on Eight-Hour Day 

Controversy 27 

Motion to Confirm 28 

Questions by SENATOR LEWIS re: 

Outbreak of Red Imported Fire 

Ant in Orange County 28 

Request for Department to Help Expedite 

Legislation that Appropriates Additional 

Money for Eradication 29 

Questions by CHAIRMAN BURTON re: 

Request that Department Form Task 

Force to Review Legislation Affecting 

Milk Pooling Act 30 

Witnesses in Support: 

SENATOR JIM COSTA 32 

BILL CAMP 

California Labor Federation, AFL-CIO 33 



VI 1 



DEE DEE MOSEKIAN 

Women's Appointment Project 

CDFA Task Force 33 

KIRSTEN POWERS 

Agricultural Council of California 33 

VALERIE NERA 

California Chamber of Commerce 33 

STEPHEN MACOLA 

California Emergency Food Link 33 

CATHY SCHMEEK 

National Audubon Society 33 

DAN TERRY, President 

California Professional Fire Fighters 34 

KAREN ROSS 

California Association of Winegrape Growers 34 

Committee Action 35 

Termination of Proceedings 35 

Certificate of Reporter 36 



P-R-O-C-E-E-D-I-N-G-S 
— 00O00 — 

CHAIRMAN BURTON: First is Maria 
Contr eras -Sweet, Secretary of Business, Transportation and 
Housing. 

Senator Polanco. 

SENATOR POLANCO: Good morning, Mr. Chairman and 
Members . 

It gives me great pleasure to introduce Governor 
Gray Davis' nominee, Maria Contreras, for the Secretary of 
Business, Housing, and Transportation. 

Members, I have known this extraordinary woman 
for well over 15-20 years. She is an exceptional candidate for 
this position. She is widely recognized throughout the country 
as a pioneer woman in corporate America, as a pioneer 
entrepreneur, and as a dedicated community member who helped 
create, nurture, and strengthen the organizations that are 
involved with opportunities for all Calif ornians. 

Ms. Contreras-Sweet was the first woman officer 
of Westinghouse at the young age of 30. She served in that 
capacity between 1985 and 1990. From 1990 to '95, she was an 
equity partner in the 7-Up RC Bottling Company. She also served 
as the elected president, becoming the first woman to serve in 
that capacity of the California-Nevada Soft Drink Association. 

Before her corporate career, Ms. Contreras-Sweet 
was a legislative chief of staff. She has continued her public 
commitments to include ongoing involvement in her later 
corporate life. In the area of health care, Members, she has 



worked to improve health services for all Californians. She is 
a founding board member of the California Endowment and former 
director of the Blue Cross of California. Blue Cross, as you 
know, is the largest health care company in the state. 

In promoting equal opportunity, she has 
demonstrated and distinguished herself as a leader. She served 
as an appointee to then-President Bush's Commission on the 
Federal Glass Ceiling, which studied the issues of equal 
opportunity. That Commission has created a landmark report 
providing the nation's history of promoting equal opportunities 
for all. 

Finally, Members, let me point out that this is a 
very historic moment, not only for Maria Contreras-Sweet • s 
career, but also for our community. She will serve in the 
history books of California as the first Latina to serve in the 
Governor's Cabinet. She has a place in history, but more 
important, she has a place in our hearts. She is a leader, a 
great role model. She will serve with great distinction, and it 
gives me great pleasure to present her to you, introducing her 
to you, and ask an affirmative vote of this body for her 
confirmation. 

CHAIRMAN BURTON: Thank you, Senator. 

MS. CONTRERAS-SWEET: Thank you, Mr. Chairman. 

I'd like to begin by first thanking your entire 
Committee and your staff for their professionalism. I have to 
tell you that throughout the ushering of this process, I have 
received a great deal of professionalism from all of the 
Members, and as I said, your staff, in particular, Nettie 



Sabelhaus. So, I wanted to thank you and compliment you for 
that. 

I must share with you, however, that it is a 
distinct pleasure to be here before you for the reasons that 
Senator Polanco said, but also because as a woman who has gone 
through, again, the vast complex organizational structure of 
Westinghouse, middle-sized companies such as 7-Up, and trying to 
run my own business, starting up my own business, I have to tell 
you that it is a real pleasure to be at the other end, and to be 
able to offer solutions and direction and guidance from a person 
who's a real user of the policies that the state imposes on the 
business sector. 

As well as being the President of HOPE, you all 
know that I helped to found an organization called HOPE, which 
stands for Hispanas Organized for Political Equality, and there 
I felt that I wanted to restore and increase and expand the 
opportunities for consumers. So, I think that I bring the 
multitude of perspectives that come from the business and the 
consumer standpoint. 

Again I want to emphasize I do bring 18 years of 
management experience, working through Westinghouse, 7-Up, Blue 
Cross, and the community involvement work that I've done through 
the California Endowment, HOPE, United Way, a myriad of 
organizations that I've served on. 

But I'm particularly impressed that I have 
received the confidence of the Governor of this administration 
when he asked me to serve in this position. You know that it is 
positioned this year to manage a budget around $10 billion and 



manage over 4 0,000 employees. To that end, we think that we're 
aptly prepared, and we think that we're going to bring a new 
vision to the Agency, and look forward to working with all of 
the Members here before me today, including the others in the 
rest of the houses. 

Thank you. 

CHAIRMAN BURTON: Questions, Members? Senator 
Lewis. 

SENATOR LEWIS: Ms. Sweet, welcome. 

It's a constant struggle for us in California to 
do what we can to make our state as competitive as possible. A 
few years ago we were really losing the battle, and losing lots 
of jobs to other states like Nevada, Arizona, Texas, et cetera. 
We took some steps that did help to make California more 
competitive, but I fear that maybe things might start to go in 
the other direction again. 

What steps can you take, or what policies can you 
fight for to try to make it easier to expand or locate 
businesses in California? 

MS. CONTRERAS-SWEET: What an excellent question, 
and I'm delighted to have it. 

I have to tell that at first blush, one of the 
things that I felt was essential that I begin to do is to build 
a constant open line of communication between the Secretary of 
Trade and Commerce and our Agency. To that end, we traveled, as 
you may have heard, to Mexico together. And we found that there 
was a real synergy that was created in that Secretary Lon 
Hatamiya was able to talk to the businesses about the 



opportunities and the availabilities here in California. And I 
was able to understand what the real barriers were for those 
businesses who had not come to California, or who had left 
California, and be able to address the efficiencies that we 
might be able to install for the oversight responsibilities that 
we bear with the private sector. 

Let me just share another point on that that I 
thought you might be interested in hearing, and that is, there 
is a task that I was given that was not made public, but it's 
one that I take as seriously, and that is that the Governor 
asked me to work with Secretary Adams of the Consumer Services 
Agency to examine ways that we can streamline government, to 
examine innovations, and to install a system that would be more 
friendly in ways that would encourage companies to come to us, 
and not be overburdened by a complex labyrinth of regulations. 

So, I think that you're going to see some nice 
thinking coming out of our agencies, that we will be able to 
bring to the rest of government, and again, to the end that 
you've identified as being so crucial. 

SENATOR LEWIS: Switching topics all together, 
what are your thoughts, what have you learned so far about the 
whole controversy related to the Bay Bridge? 

CHAIRMAN BURTON: Wait. Pardon me. 

SENATOR POLANCO: On that note, Mr. Chairman, 
with all due respect. 

MS. CONTRERAS- SWEET: Is there a controversy? 
[ Laughter . ] 

SENATOR LEWIS: What are your thoughts about the 



trade-off in terms of redesign for aesthetic purposes, or for 
relocation of the exact route for other reasons relative to 
something, costs that are going to be lost, maybe? Have you 
given some thought about what are price are you willing to pay 
to accommodate those that want that kind of a change? 

MS. CONTRERAS- SWEET: Sure. I, again, appreciate 
the question. And just again to your earlier question, let me 
say that sometime ago, the battle was taken on. And that is 
that the regions should determine what their plans are. To that 
end, we understand that 75 percent of the funds now go to the 
regions. And while we have a role in examining the ways that we 
use our ITIP funds, the Interstate funds, we are allowing the 
local regions to make their policies. 

Caltrans has no policy position. We're allowing 
local regions make their own, take their own positions on the 
way they want to go. 

As it relates to aesthetic challenges, I do 
believe we need to bring beauty to projects, by the way. I 
don't know they have to always cost more. I think we can be 
more creative. And so, to that end, I've challenged Caltrans 
and Director Medina to examine ways. 

You know, this is California, and I know that you 
appreciate when you travel throughout Europe and throughout the 
rest of the world, that it's a beautiful experience to travel 
through roads and to see historical buildings. They are an 
attraction. 

I think we have to examine ways that we can make 
our roads, our walls, more beautiful, and see if there's ways 



that we can do it efficiently without adding cost. 

SENATOR LEWIS: Well, if there are cost overruns, 
who will ultimately bear the costs? 

MS. CONTRERAS-SWEET: Again, I would have to 
examine. I think each case has to be taken on an individual 
basis. 

But I don't think that always when we talk about 
adding aesthetic value that there are increased costs. If there 
are, you have to see — you know, you have to take each case as 
it is and just see what value it really adds to the community. 

SENATOR LEWIS: I've heard it said that if the 
project is delayed as much as a couple of years, the costs could 
go up anywhere from 50 to 100 million dollars. 

Does that come out of the whole state highway 



project? 



CHAIRMAN BURTON: Orange County flood subvention. 

[Laughter. ] 
SENATOR LEWIS: That's already been taken care 



of. 



CHAIRMAN BURTON: If I could, the bill that set 
up the funding mechanism, if you're talking about the Bay 
Bridge, that increased the tolls two dollars or an extra dollar 
on all of the Bay Area bridges, I think that legislation itself 
said, if in fact there were cost overruns — and I'm not sure 
how that's defined — that they would have to come back to the 
Legislature to figure whether we would continue to augment the 
tolls, or wherever it comes from. 

I do not believe it could be an administrative 



8 

decision. I had somebody to the staff check that out. That's 
my thoughts. 

We would have to decide whether to extend the 
tolls, whether to do something else, or whether to let the 
bridge fall. But it wouldn't be, I don't think, Senator, an 
administrative decision. 

SENATOR LEWIS: Okay. 

Last area of interest for me, what's your 
position on whether or not the cost of Hawkins vacancy 
de-control, for rent control purposes, the measure should be 
repealed? What is your position on whether or not there should 
be a statewide mobile home rent control? 

MS. CONTRERAS- SWEET: I have to share with you 
that housing is an area that is very important to the Governor, 
to the point that he announced that we would be charged with 
chairing a Housing Task Force. So, we have not formulated any 
preliminary thoughts on any specific given position. 

But we will be pulling together with Phil 
Angel ides and with Lieutenant Governor Cruz Bustamonte a brain 
trust and a wonderful group of people who will be guiding us 
through many of the complex issues around housing. 

SENATOR LEWIS: Thank you, Mr. Chairman. 

CHAIRMAN BURTON: Senator Baca, then Senator 
Hughes . 

SENATOR BACA: Thank you, Mr. Chairman. 

Maria, could you please tell us what experience 
you've had in dealing with diversity, and what commitments will 
you make in either promoting a diverse workforce through your 



Agency, since you have a big responsibility? 

MS. CONTRERAS- SWEET: We do. You know, Senator, 
that one of the assignments that I had on a volunteer basis was 
working with the federal government on the Federal Glass Ceiling 
Commission. We found that there are many artificial barriers to 
helping women and minorities get to the top levels of private 
sector and government. We found that those barriers come in 
different ways. One, of course, is just the differential 
barrier. There's some just old vanilla prejudice that exists 
out there. 

And then the second piece is the supply barrier, 
what we do with our academic institutions to make certain that 
the readiness of our workforce exists. 

And third, that we break down any artificial 
barriers that exist in the hiring institutions. And so, I 
believe in performance-based hiring. And that is where we 
actually examine the real task and not put artificial 
requirements in people's qualifications, if you will, so that 
they can indeed, if they can do the job, and they've done it 
before in other places, why can't we bring them in and not build 
artificial standards and requirements to bringing people in. 

So, I hope to employ some of those strategies. 
We are, of course, casting a wide, wide net throughout our 
Agency to make certain that we are pulling in geographic and all 
the different diversities that exist in our great state. 

Also, we are going to be working with small 
businesses on procurement opportunities and making certain 
there, too, that we have mentoring opportunities that will allow 



10 

all people in small, medium businesses to have an opportunity to 
be mentored by some of the larger businesses, to make certain 
that they get an opportunity to grow and to learn, and to help 
this economy to move forward. 

SENATOR BACA: Thank you. 

I have another question. The need for greater 
support for housing, in the past few years, very few initiatives 
have been taken to provide affordable housing for California. 
What plans do you have to help millions of Californians who need 
affordable housing? 

MS. CONTRERAS- SWEET: Again, I'm grateful for the 
question, because that is something that I come in with a 
passion for, Senator. 

I have to tell you that personally, as I see it, 
we have four huge opportunities. One, of course, is home 
ownership. We rank, I think, the third lowest in the nation in 
terms of home ownership rate, and some of the reasons are 
obvious: land values are steep here. But then there's also 
been pent up funds in different resources that we think ought to 
be unleashed. 

And so, home ownership will be a big program for 
us. 

A second opportunity is the farmworker community, 
California's agricultural community, and I think we have to 
address that group. 

In our urban communities, we have the plight of 
the homeless, and I think we have work with the federal 
government to see what opportunities we can develop in a 



11 

synergistic way to make certain that we address that piece. 

And lastly, and just as important is, we want to 
work with the private sector to encourage building, and we want 
to work with them to really unleash opportunities there to make 
certain that we are doing everything that we can in the urban 
and suburban areas to grow the housing stock. 

SENATOR BACA: One final question. I don't know 
if you've had an opportunity to look at it, but there's been 
studies that have been done by the University of North Carolina 
that pertain to the overhead costs. 

Have you had an opportunity to look at that? 
Apparently, it says that California has spent an excessive 
amount of dollars on administrative costs versus in some of the 
other areas. 

I don't know if you've had an opportunity, but 
please look at That as well. 

MS. CONTRERAS-SWEET: Senator, I had heard about 
that early on as I stepped into my position. It was of concern 
to me . 

I have met with Caltrans on this subject. Now, 
we will be taking into consideration the different variances 
that were really not as thoroughly examined in that report. And 
that is that California highways are much more complex. So, I'm 
trying to examine whether or not it's an apple-to-apple 
comparison. What I mean by that is that many highways in other 
states are one-lane, two-lane, and ours are three, four, five, 
and six lane freeways, and even wider in certain areas. So 
clearly, we have a more complex system. 



12 

I just am trying to examine what the real 
comparisons were. And if we are deficient, we will look at what 
the cultural problems are within the Department, and how can we 
remedy them to make certain that we're more effective. 

We have to make certain that project delivery is 
an imperative. And so, what we want to do is make certain that 
we are using talent in a way that gets us to that end. 

There's some challenges at different levels. 
Some of them are with the local regions. Now that we have, as I 
stated earlier, allocated 75 percent of the resources to the 
local regions, some of the challenge is that the regions were 
not in all places in the state adequately prepared to assume 
that large responsibility. So, we're examining ways that we can 
mentor with the regions to also make certain that the local 
regions are meeting their deadlines. 

SENATOR BACA: Thank you. 

CHAIRMAN BURTON: Senator Hughes. 

SENATOR HUGHES: Madame Secretary, how do you 
feel about the Governor's moving the regulation of the HMOs out 
of the Department of Corporations, and how do you think it will 
work? Will it be better or worse for the HMOs? 

MS. CONTRERAS- SWEET: Excellent question. I have 
to share with you that this is an area that gave me some pause, 
because again, I think every one of us in this room probably has 
a personal anecdotal comment to make about their experience with 
their HMO. So, we all have, if you will, some expertise around 
this issue. 

I care about that very much, Senator. And I must 



13 

tell you that the Governor gave us three very important bases to 
work from. One is to restore the physician's primacy. Secondly 
is to allow the consumer, the actual patient, to have a second 
independent review. And third is to make certain that we hold 
those accountable for their decisions. 

On that point, I feel that it is an axiom. It is 
a super important point for us to make certain that we have an 
independent focus on health care. So, I was delighted to hear 
that the Governor made this a priority. It was something that 
he and I discussed at length during my interview. And I was 
delighted that he made such a strong commitment. 

I support the commitment and feel that if we have 
an independent department that is solely focused on health 
managed care, that we will be able to give it the kind of 
attention that it deserves. And so, I was very supportive, and 
it was one of the attractive points in our interview. 

SENATOR HUGHES: Thank you. 

I'd like to move the nomination. 

CHAIRMAN BURTON: How about I get a shot here. 

That would be an independent department under 
Health and Human Services? Never mind. 

There's a couple questions. You probably haven't 
had a chance to deal with this, but there's been a long time 
controversy in the state dealing with whether or not plastic 
pipes create a toxic and potential, I guess with a small "p" or 
big "P", poison problem to the people that are drinking the 
fluid that runs through them. And there's been controversy back 
and forth. 



14 

There was a quick study done by the Wilson 
administration. There was then a lawsuit. Then both parties 
agreed to delay the trial until basically the beginning of next 
year, that would give time for this administration and the 
Legislature an opportunity to look into it. 

I wouldn't ask you to respond now, except to 
commit to have somebody on your staff look into the past history 
of this and maybe meet with those on both sides of the issue so 
You can get up to date, and we can have the benefit of your 
counsel on that. 

On the issue of homelessness, I don't think we 
can wait for the federal government. I am not sure what we can 
do, but I would strongly hope that you and, you know, through 
the Governor, or the Governor through you, would create a task 
force on homelessness to see how we can deal with the issue. 

You know, you've got the problems of those who 
lived somewhere last week, lost their job, missed a rent 
payment; they're living in their car or out in the street. 

You have those that have been unemployed for 
quite awhile and are out on the street, or those who were 
veterans. 

Those that are still floating around from the 
closure of the mental hospitals back in the '70s. 

And then you have people that, even when I was 
growing up, there were always some that were literally out on 
the street. 

I think we have to find some way incrementally to 
do things. I don't know what they are. Some people think that 



15 

having some form of dormitories is demeaning because people 
don't have privacy. It's not for me to say, but having lived in 
college dorms and Army barracks beat the hell out of being 
outdoors in the rain and snow. 

I would just hope that you could put together a 
task force with a variety of groups — business people, homeless 
advocates, nonprofit groups, church groups — to see what we can 
do. Because it affects everybody. 

In our city, no one likes to see the homeless by 
Civic Center, so we moved them out of there. Then they're in my 
mother's neighborhood; she doesn't want to see them, so they 
move them to the park. People don't want to see them in the 
park, and it's a round table. Unless they can figure out a way 
to ship them all to the Farralon Islands, the citizenry would 
not be happy. That's not the solution because the sea gulls out 
there could possibly become unhappy. 

So, I would hope that would really be a top 
priority because it affects everybody whether they're homeless 
or not because no one likes to see it, either because they don't 
like the human tragedy, or because they're just personally 
offended by the sight. 

But it's something that we have to address, and 
we're not going to solve it totally. I don't think we can wait 
for the feds, but if we come up with some innovative programs, I 
think there might be funding there. 

Lastly, Senator Alarcon and I are proposing a 
housing bond in an amount that maybe too large for what the 
Governor's thinking. We're working with the builders, the 



16 

first-time home ownership, and use of what they call the 
so-called silent second that would help eliminate the down 
payment problem, that more people can afford the mortgage but 
can't afford the down payment, so they're stuck. Moneys to go 
for senior citizen and disabled housing, which we find is very 
popular because very few seniors and disabled get involved as 
perpetrators of gangs and drive-by shootings. Code enforcement 
in local communities. 

We will get you this package as it works out, but 
a variety of groups, from the do-gooder groups to the people who 
make money building homes, are very supportive of this. I would 
hope that the Governor, after you get a chance to look at it, 
would do it. 

I would ask first of all, why don't you introduce 
members of your family here? 

MS. CONTRERAS-SWEET: I have to tell you that my 
children are in school, and so I just thought it would not be a 
good example to pull them out. 

[ Laughter . ] 

CHAIRMAN BURTON: It's all right with us. The 
Governor would yank your confirmation, probably. 

[ Laughter . ] 

MS. CONTRERAS-SWEET: I did invite my husband, 
Ray Sweet . 

CHAIRMAN BURTON: Witnesses in support: name, 
organization, and support. 

MS. MINNEHAN: Yes, sir. 

Christine Minnehan. It is our inestimable 



17 

pleasure to support the nomination of Maria Contreras-Sweet. 
Western Center on Law and Poverty in full support. 

Thank you. 

MR. BROWN: Marc Brown, CRLA Foundation, one of 
the do-gooder groups in support. 

MR. CARTER: Art Carter, California Pipe Trades 
Council in support. 

MR. SAYLES: Thomas Sayles, Semper Energy, former 
Secretary of Business, Transportation and Housing in full 
support . 

MR. SUSZKO: Chuck Suszko, Professional Engineers 
in California Government. Full support. 

MR. READ: Mr. Chairman, Members, Aaron Read 
representing the California Association of Highway Patrolmen in 
full support. 

SENATOR CALDERON: Senator Burton, Chuck 
Calderon, private citizen, urging your full support. 

MR. GOTTLIEB: Mr. Chairman, Larry Gottlieb with 
the Kaufman and Broad Home Corporation. 

As America's largest home builder, we have a keen 
interest in seeing positive policies, the kinds that you 
described, that Senator Baca inquired into. And we have full 
confidence that the Governor has found the person who can 
deliver those things. 

MR. PERNELL: Mr. Chairman and Members, Robert 
Pernell, representing the State Council of Laborers. We're in 
full support. 

MR. ARNOLD: Mr. Chairman, Bob Arnold, California 



18 

Credit Union League. As consumer representatives, we offer our 
full support. 

CHAIRMAN BURTON: Senator Solis for a few 
comments. 

SENATOR SOLIS: Yes, just to say that I'm 
delighted to be here to support the confirmation of Maria 
Contreras-Sweet. I've known her for 15 years in her capacity in 
the business community as well as someone who has led diversity 
in the state through her own private and charitable efforts 
throughout the past years. I think she's a very good 
individual, well eguipped to take on challenges to California. 

We're working with her and the administration 
already on some housing initiatives to provide support 
wrap-around services, so to speak, for welfare recipients. 

So, I urge her confirmation. 

CHAIRMAN BURTON: Moved by Senators Hughes and 



Baca. 



Any opposition? 

Call the roll. 

SECRETARY WEBB: Senator Baca. 

SENATOR BACA: Aye. 

SECRETARY WEBB: Baca Aye. Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 



19 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Five to zero. 

CHAIRMAN BURTON: Congratulations. 

I was going to say when you came up, I wondered 
where your top hat was, you know, you're like a drum majorette. 
But after answering Senator Lewis' questions, you are a 
wonderful dancer, too. 

[ Laughter . ] 

MS. CONTRERAS- SWEET: Thank you very much, 
Senator. 

CHAIRMAN BURTON: Next is Secretary Lyons. 

Senator Costa was going to be here to make an 
introduction. He's off making a speech. 

I see Senator Peace, who will briefly introduce. 

SENATOR PEACE: Mr. Chairman and Members of the 
Committee, to me it's an opportunity today to consider a nominee 
for Agency Secretary position who is extraordinarily qualified 
and has assembled a very broad base of support. Governor Davis' 
nomination of Bill Lyons as Secretary of the Department of Food 
and Agriculture has been enthusiastically endorsed by every 
major agricultural association. 

In addition, he's been endorsed by a bipartisan 
coalition of Valley Legislators and elected officials 
representing every level of government: local, state, and 
federal. These endorsements are based on Bill Lyons' record and 
reputation earned as a farmer, an agri-businessman, an elected 
official, and his life-long involvement in his community and 
state. 



20 

Since 1976, Bill has been an integral part of the 
business community as the General Manager of Mapes Ranch, which 
is a Central Valley family farming and ranching operation which 
consists of 6,000 acres and which has been in the Lyons family 
for 75 years. 

During that same time, he has been the General 
Managing Partner of Lyons Investments, a diversified family and 
ranching partnership of approximately 3,000 acres, where he 
grows a variety of crops and owns and manages a 1700 pair cattle 
operation. 

Bill Lyons has also served with distinction in a 
wide variety of appointed and elected offices. Since 1993, he 
served as Chairman of the United States Department of 
Agriculture Farm Services Agency, overseeing 200 employees and 
3 2 offices, serving farmers and ranchers in 58 counties. From 
1996 to 1998, he served as Director of the East Stanislaus 
Resource Conservation District. Since 1996, he served as 
Director of the Doctors Medical Center Board of Directors for 
the largest health care provider in Stanislaus County. 

From 1989 to 1993, he served on the California Farm 
Bureau Board of Directors. From 1984 to 1995, he served on the 
Modesto Irrigation District Board of Directors. Most recently, 
he was named Director of the Central Catholic High School Board 
of Directors in Modesto. 

He was an Outstanding Young Farmer many years 
ago, and in 1984 he was named Outstanding Young Man of the 
United States of America. 

He has served and continues to serve with the 



21 

Salvation Army, United Way, YMCA, Boy Scouts of America, and 
other fund raising groups. He was President of the Stanislaus 
Alien Legalization for Agriculture in 1990, and Vice President 
of the Modesto Chamber of Commerce 1990-91. 

He attended California State University at 
Chico. He is married, has four children. The Lyons family 
represent the best traditions of community service and 
commitment to California. 

And he is also a long-time friend of those of us 
who toiled in the vineyards of the Legislature, from the Central 
Valley, from Southern California and elsewhere, known by various 
acronyms, but now serving in Congress and other places that I'll 
leave unstated. 

CHAIRMAN BURTON: Who wrote the speech? You or 



Condit? 



SENATOR PEACE: Lynch. 

CHAIRMAN BURTON: Secretary Lyons. 

MR. LYONS: Good morning, Chairman Burton, 



Senators. 



I appreciate the opportunity to speak before you 
today, this morning, regarding the confirmation of my 
appointment by Governor Davis as the Secretary of the California 
Department of Food and Ag. 

As you have seen my resume, I have been actively 
involved in numerous business and community-related boards and, 
committees, most recently as the Chairman of the United States 
Department of Agricultural Farm Service Agency State Committee, 
which managed approximately 230 employees located in 32 offices 



22 

statewide, with a budget of over $500 million in USDA programs. 

I've spent the last 2 years married to my 
wonderful wife, Suzy, who happens to be here today, sitting 
behind me. And we've been blessed with four children: three 
boys, one girl, ages 12 to 18. 

I'm honored by my appointment by Governor Davis 
as his Secretary of the Department of Food and Agriculture. I'm 
looking forward to working with all California's citizens on 
speaking solutions to the numerous issues facing California as 
we move into the next century. 

In the recent past, the leadership in the 
Department's Executive Office received significant scrutiny from 
the Consumers Union and others over perceived conflicts of 
interest. I intend to strictly adhere to the requirements of 
the Fair Political Practices Act, the Department's in-house 
policies and regulations, and to the Department's recusal 
process. I will recuse myself from any and all interests that 
could be a conflict with my family's business. 

In the area of the Department's programs, I 
believe that the Department can pursue further promotion of 
trade opportunities for California's agricultural products 
throughout the world. We can provide critical input towards 
negotiating non-tariff barriers that primarily include 
phytosanitary and sanitary barriers to our products. We can 
also improve our efforts to educate the industry on potential 
marketing opportunities. 

The Department continues to play an important 
role in the enforcement of the state's food safety and quality 






23 

standards. I am proud of the voluntary efforts by industry in 
California to address food safety issues. Examples include the 
California Egg Quality Assurance Program and the Dairy Quality 
Assurance Plan. 

However, I will be very focused on enforcement of 
laws and regulations that protect the public, especially 
pregnant women and children, from illnesses resulting from food 
borne pathogens in milk and dairy products and other food 
commodities. 

As Senator Lewis is personally aware, the 
Department is the state agency with responsibility for 
preventing infestations of non-native weeds and insects in the 
state. Invasive pests are not exclusively an agricultural 
problem. The invasion of non-native weeds and insects has been 
identified several times in the last few months as the largest 
threat to survival of native species in the US, even larger than 
encroachment on habitat by development. Red Imported Fire Ant 
and Yellow Star Thistle are two examples of imported pests that 
are negatively impacting our urban and rural communities. 

I intend to ask the Department to step up efforts 
to review and improve our systems of detection, and to exclude 
non-native pests before they become established in our state. 

As a former Chairman of the USDA's Farm Service 
Agency State Committee, I am well aware of the dollars that 
potentially could come to California from the Agency for 
environmental, farm, farmworker, and rural housing programs. I 
will work to see that California gets its fair share from those 
funding resources. 



24 

As I stated in my letter to Chairman Burton, I'm 
especially proud of the broad base of support my appointment 
received from agriculture, from business, and environmental 
leaders. 

I consider myself an able member of the 
Governor • s team who would represent his administration to the 
agricultural community, the environmental community, and the 
people of California with dignity, honesty, and respect. It 
would be an honor to continue to serve this administration as 
the Secretary of the California Department of Food and 
Agriculture, and again, I thank you for your consideration. 

CHAIRMAN BURTON: Senator Baca, then Senator 
Lewis. 

SENATOR BACA: Thank you, Bill. 

As you know, the freeze that we had, many of the 
farmers have suffered some terrible losses as a result of the 
freeze. 

What are you doing to help these workers at this 
point? 

MR. LYONS: Senator, the third day on the job, 
January 7th, I had really the unfortunate job of actually going 
down to the freeze area — Fresno, Tulare, the Kern County 
area — as we had over $650 million of damage. As the Secretary 
of the California Department of Food and Agriculture, it was my 
responsibility to do that. 

We have worked in concert with the Governor 
himself and with his other agencies, working with both the 
federal and our local officials. We're very proud of the fact 



25 

that we believe that we've addressed as many problems as we can 
down there in a record amount of time. 

OES, Dallas Jones, which I believe was in front 
of your Committee several weeks ago, has been a leader, and we 
have had an excellent working relationship. I believe that we 
have responded in both a timely manner to a majority of the 
problems in that area. 

SENATOR BACA: Thank you. 

SENATOR LEWIS: Mr. Secretary, good to see you 
again. 

There * s been a lot of press attention recently 
about milk in the state of California. I understand that we 
have the highest standards of milk in the entire nation, and 
that there's obviously some kind of a trade-off. On the one 
hand, having the higher quality; on the other hand, perhaps 
restricting competition from other state producers that would 
have to be forced to meet a higher standard than they are in 
their own home state. 

Can you shed any light on that? What's your 
position on whether or not any standards should be relaxed at 
all? 

MR. LYONS: I believe, Senator, that we should be 
proud of the fact that we have the highest standard of milk in 
the nation. I think it's a responsibility of my agency to 
ensure that it's one of the highest and it is the highest 
standard of milk within the nation. 

As you recently probably have seen, we've 
actually — the Department instituted a 50 cent per gallon 



26 

reduction at farm gate level. Hopefully, that'll be carried 
through to the consumers. 

But it is a consumer issue. Just recently, I 
asked my Department to actually do a telephone survey within the 
Sacramento area. You can buy a gallon of milk anywhere from 
$2.60 to $3.60 at the retail level. 

Milk is a commodity that I believe is extremely 
important for especially our young children. I believe that we 
should keep the high standard, a standard that's well known 
throughout the nation. 

SENATOR LEWIS: Forgive me, I don't have a lot of 
ag. in my district, but is there some kind of a law on the book 
that prohibits retailers from using milk as a loss leader? 

MR. LYONS: Yes. 

SENATOR LEWIS: What's the justification for 



that? 



question. 



it on? 



MR. LYONS: Senator, I'm not able to answer that 

CHAIRMAN BURTON: I can. Do you want me to take 

SENATOR LEWIS: Farmer John, go ahead. 

CHAIRMAN BURTON: Swing vote on the milk bill 30 



years ago, 



One of the theories that's been advanced, and 
it's been on the books for a long time, why you can't sell milk 
below the cost of the milk would be to stop the big chains from 
using milk as a loss leader, bringing people in, having an 
adverse effect on either smaller stores or mom-and-pop stores 



27 

because it's such a basic commodity that they feel it could have 
an adverse impact on a smaller grocery stores, the mom-and-pop 
type stores from doing business. 

That's a theory at least that I got the first 
time I looked at it, which was back in the '60s, and there may 
have been other things. 

But really it's a prohibition of selling it below 
the cost of selling it, so to use it as a loss leader. 

SENATOR LEWIS: Sounds like an interesting 
protectionist theory. 

CHAIRMAN BURTON: Well, it depends on how many 
mom-and-pop stores you've got in your district. 

SENATOR BACA: I've got all the cattle in my 
district, 350,000. 

CHAIRMAN BURTON: And they all voted for you. 

SENATOR LEWIS: Don't be telling those trade 
secrets now. 

We recently heard from the Department of 
Industrial Relations relative to they're still trying to flesh 
out what they ultimately want to do on the eight-hour day 
controversy. But I understand that agricultural workers have 
been exempt from those requirements in the past. 

What's your thought on that? 

MR. LYONS: Senator, I have to speak as coming 
from the agricultural industry. My relationship and my private 
role was, we had a great relationship with our workers and our 
laborers. 

I don't have a philosophy or a policy on that. 



28 

At this time I feel uncomfortable in addressing that particular 
issue. 

SENATOR LEWIS: Fair enough. 

SENATOR BACA: Move the nomination. 

SENATOR LEWIS: We'll recognize the motion, but 
we'll hold the vote for a minute. 

Lastly, as you know, I've been concerned about 
what you've already mention, and that's the outbreak that we 
have in Orange County and a couple of other adjoining counties 
with the Red Imported Fire Ant. 

The Department originally was going to be 
forthcoming with their action plan in mid or late February, I 
think it was. 

Can you give us your most recent up-to-date 
explanation of where that stands, and also maybe a little bit of 
up-to-date information on what's going on in terms of what you 
found recently about the depth of the problem? 

MR. LYONS: Senator, that is an area I feel 
fairly comfortable with to address. It is serious concern. In 
fact, just last Saturday, I was down in Orange County to review 
it personally myself. It's an area that the Department is 
working diligently on, especially with a number of other state 
agencies, also with a number of the local stakeholders and with 
the environmental communities. 

We've had, I believe, two public sessions that 
we've attended down in Orange County. We are continuing to 
review and modify our draft plan, and we hope to be able to 
deliver that plan within the next several weeks on what our 



29 

thoughts are on how we should eradicate/ control this particular 
pest. 

SENATOR LEWIS: Unfortunately, it's starting to 
seem that the several weeks keep kind of dragging on to be 
several more weeks, and I'm starting to get a little bit 
anxious. 

MR. LYONS: Senator, I can assure you that I 
think it was extremely important for me to be down there and to 
actually see it first-hand. And I made the decision to go down 
there. I actually took my under-secretary with me to review it 
first-hand. And I'm confident, I'm confident, that we're going 
to have a plan that's going to address some of the local 
issues. 

SENATOR LEWIS: As you know, I'm carrying 
legislation that would appropriate additional moneys for the 
Department to help out with your plans on eradication. 

I appreciate the fact that some of your staff was 
at the policy committee hearing, but I hope you help us expedite 
that legislation through the legislative process. 

I'm getting increasingly nervous that we're 
getting close to the point of no return, where eradication will 
no longer be an option in Orange County unless we move quickly. 

MR. LYONS: Senator, I can assure you that this 
particular issue is one of my primary issues. I deal with this 
every day. I'm in contact with my staff. My staff is in 
contact with a number of local agencies. 

It is a serious problem, and we plan to deal with 
it. 



30 

SENATOR LEWIS: Mr. Baca made a motion, 
Mr. Chairman. 

CHAIRMAN BURTON: I would suggest, and I don't 
know whether it should be inter-agency or just Ag. alone, but 
we've got, I think, three deals going on milk right now. 

One is dealing with the below cost. One is 
dealing with milk imports, so to speak. And one is, I think, 
dealing — although I haven't seen it — maybe with some 
modifications of the Milk Pooling Act. 

I think all three of those bills, although 
they're not necessarily interrelated, I think they're all going 
to have a ripple effect on the industry as a whole, and one 
could or could not lead to another. 

I would hope that the Department would, as soon 
as you get either your feet wet or dry, put together a task 
force to review this, because people will wonder, you know, why 
can't milk be used as a loss leader. Is it a protection for 
mom-and-pop stores or is it doing whatever it is. 

I think the most interesting thing is that it's 
clear the container damn near costs more than the milk. You 
know, you buy a quart of milk, it's going to cost you about 70 
percent of what a half-gallon's going to cost you, which again 
costs well over 50 percent, or close, over what a gallon costs 
you. There's more money, and maybe if we get them in the 
two-and-a-half s, like we used to do with ice cream, it'd come 
even cheaper. 

But, take a look at the pricing mechanism. Take 
a look at the health standards issue, and take a look at really 



31 

the effects of the Milk Pooling Act, because it's all coming 
back into focus. 

And I think the fact that more and more of us 
represent urban-suburban districts, I've got a handful of dairy 
men in the district I represent, but nothing like Senator Costa, 
or Baca, and Poochigian, or some of the others, but I think it's 
something to be looked at, so that if we do act in this area, we 
act realizing what the consequences will be. And I don't 
necessarily mean they're going to be bad, but what the 
consequences or the effects of our action are going to be. 

Because we have, I think, in the Legislature now, 
except some people from ag. districts who are, like Jimmy and I 
don't know who else that maybe have relationship with dairy 
farming, and myself, because I happened to be on the Ag. 
Committee years ago when a lot of this stuff happened, nobody's 
got a concept of the history or the why of it. 

I think it's very important for the Department or 
the Agency to review these programs, to take a look so that if 
the Legislature decides to do something, yeah, milk will be 
three cents a gallon less, and the effect of it's going to be 
something over here, so we know the total effects. I think 
that's something I would strongly suggest. 

MR. LYONS: Thank you, Senator, for those 
comments. I'll definitely take those suggestions back to my 
Department . 

CHAIRMAN BURTON: Senator Costa wanted to make 
some comments. We'll ask for people to just come up and 
announce their support and opposition, if any, then we'll go to 



32 

a vote. 

SENATOR COSTA: Thank you very much, Senator 
Burton, Chairman and Members of the Rules Committee. 

I do want to add my support to Secretary Bill 
Lyons. I think his background and experience speaks well for 
itself. I think he's an excellent appointment as the Secretary 
of the Department of Food and Agriculture in California. 

And I think the Chairman's comments as they 
relate to a host of issues involving California agriculture are 
on point. We, a year-and-a-half ago, Chairman Cardoza and 
myself, held ten months of meetings with the milk industry. 

And when the Act was created back when Senator 
Burton was an Assembly Member back in the late '60s, early '70s, 
a lot has changed over that 25-28 year period. And I think it's 
appropriate that the Department take look at that with all the 
various interested parties in this state and make some 
recommendations as to whether or not changes should be done. 

I think the policy committee's going to do 
likewise. 

There are other issues that he's involved with: 
from trade, to the ability to protect our port of entries, to 
maintain the quality and the health quality standards of our 
agricultural products. I think that in a host of fields, he is 
already beginning to advise the Governor on the difficult 
challenges facing the California agricultural industry, and he 
has committed to work closely with Members of the Legislature, 
he has promised me, to ensure that we have a good working 
relationship, and I think that's important. 



33 

For all those reasons, I would urge your support 
of this nomination. 

CHAIRMAN BURTON: Thank you, Senator. 

Individuals in support, come up briefly, just 
identify yourself. 

MR. CAMP: Mr. Chairman, Bill Camp, representing 
the California Labor Federation, AFL-CIO. 

We support Director Lyons. He's worked with us 
in the citrus freeze, and we found him to be a good partner. 

MS. MOSEKIAN: Good morning, Dee Dee Mosekian, 
representing the Women's Appointment Project CDFA Task Force. We 
strongly support Bill Lyons' confirmation. 

In addition, I'm legal counsel to Congressman 
Condit, and he is in Washington today, and would also like to 
urge the confirmation. 

Thank you. 

MS. POWERS: Kirstin Powers, Agricultural Council 
of California in support of the nomination. 

MS. NERA: Valerie Nera of the California Chamber 
of Commerce in support of the nomination. 

MR. MACOLA: Mr. Chairman, Stephen Macola on 
behalf of the California Emergency Food Link in support. 

I might also add, I had the privilege of serving 
this body as the Staff Director to the Senate Ag. Committee for 
20 years, and I recommend him personally without qualification. 

MS. SCHMEICHEN: Kathy Schmeichen, National 
Audubon Society in support. 

CHAIRMAN BURTON: I want to hear this one. You 



34 

sit down; I want to hear it all. 

MR. TERRY: Good morning, Senator. Dan Terry, 
President of the California Professional Fire Fighters, and have 
very little to do with the Department of Agriculture. 

But I do — Bill Lyons is a 20-year friend of 
mine. Both myself — I was ten years on the Board of 
Supervisors of Stanislaus County when Bill was the head of the 
Farm Bureau. 

He is a man of great integrity. I know him, his 
wife, his entire family. You haven't lived until you've got a 
Christmas card from the Lyons family. 

So, I'm here to urge your support of Bill. 

CHAIRMAN BURTON: I thought it was about his 
concern for the Fire Ants. 

MS. ROSS: Karen Ross, California Association of 
Winegrape Growers. 

We're enthusiastic supporters of the Secretary's 



nomination. 



CHAIRMAN BURTON: Any opposition. 

Moved by Senator Baca. Call the roll. 

SECRETARY WEBB: Senator Baca. 

SENATOR BACA: Aye. 

SECRETARY WEBB: Baca Aye. Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight, 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator Lewis. 

SENATOR LEWIS: Aye. 



35 



SECRETARY WEBB: Lewis Aye. Senator Burton. 
CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Five to zero. 
CHAIRMAN BURTON: Congratulations. 
MR. LYONS: Thank you, Senator. 
[Thereupon this portion of the 
Senate Rules Committee hearing was 
terminated at approximately 10:25 A.M.] 
— 00O00 — 



36 

CERTIFICATE OF SHORTHAND REPORTER 

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10:02 A.M. 



375-R 



Reported by: 



SENATE RULES COMMITTEE 



STATE OF CALIFORNIA 



HEARING 



STATE CAPITOL 



ROOM 3191 



SACRAMENTO, CALIFORNIA 



WEDNESDAY, JUNE 2, 1999 



10:02 A.M. 



Evelyn J. Mizak 
Shorthand Reporter 



11 



APPEARANCES 

MEMBERS PRESENT 

SENATOR JOHN BURTON, Chair 

SENATOR JOHN LEWIS, Vice Chair 

SENATOR JOE BACA 

SENATOR TERESA HUGHES 

SENATOR WILLIAM KNIGHT 

STAFF PRESENT 

GREG SCHMIDT, Executive Officer 

PAT WEBB, Committee Secretary 

NETTIE SABELHAUS, Consultant on Governor's Appointments 

WADE TEASDALE, Consultant to SENATOR LEWIS 

FELICE TANENBAUM, Consultant to SENATOR HUGHES 

DAVID OROSCO, Consultant to SENATOR KNIGHT 

MANNY HERNANDEZ, Consultant to SENATOR BACA 

ALSO PRESENT 

ROBERT E. BURTON, Commissioner 
Workers' Compensation Appeals Board 

TOM M. HANNIGAN, Director 
Water Resources 

SENATOR JIM COSTA 

JACKSON R. GUALCO 
The Gualco Group 

STEPHEN A. MACOLA 

Moulton Niguel Water District 



Ill 
INDEX 

Page 
Proceedings 1 

Governor ' s Appointees : 

ROBERT E. BURTON, Commissioner 

Workers ' Compensation Appeals Board 1 

Background and Experience 1 

Questions by SENATOR LEWIS re: 

Bloodlines 2 

Motion to Confirm 2 

Committee Action 3 

TOM M. HANNIGAN, Director 

Department of Water Resources 3 

Introduction and Support by 

SENATOR JIM COSTA 3 

Questions by SENATOR LEWIS re: 

Tabling Amendments 5 

Questions by SENATOR HUGHES re: 

Teaching about DWR 5 

Questions by SENATOR BACA re: 

Monitoring of Underground Water 

Supplies in California 6 

Motion to Confirm 7 

Witnesses in Support: 

JACKSON R. GUALCO 

The Gualco Group 7 



IV 



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STEPHEN MACOLA 

Moulton Niguel Water District 7 

Questions by CHAIRMAN BURTON re: 

CAL-FED Process 7 

Legislative Role in Process 8 

PG&E Hydro Power Divestiture 8 

Integrated Storage Investigation 9 

Committee Action 10 

Termination of Proceedings 10 

Certificate of Reporter 11 



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P-R-O-C-E-E-D-I-N-G-S 
— ooOoo — 

CHAIRMAN BURTON: The first Governor's 
appointment is for the Workers' Comp. Appeals Board, Robert 
Burton . 

MR. BURTON: Good morning. Thank you very much 
for inviting me here. 

CHAIRMAN BURTON: Do you want to open with your 
statement . 

MR. BURTON: Make a statement, well, I was 
appointed by the Governor for this position. I had held it 
previously from 1979 to 1984. 

As you know, or maybe you don't know, it is a 
judicial body. It is not an administrative one. There's a lot 
of confusion. 

I noticed one of the questions that was given to 
me, general information, was: How many cases do you hear? We 
hear zero. We have paper. 

After a case has been decided at the trial level 
by what we call a Workers Compensation Judge, and other folks 
call administrative law judges in other areas, they come up for 
us on appeal. One side or the other, sometimes both sides, are 
unhappy. It's our job to adjudicate them. We may change the 
whole thing, change the records. We are totally autonomous in 
this area. 

We get approximately 62 00 a year that come into 
the office. Owing to a shortfall in bodies, we have only three 
of us to handle that load for the moment. It's a seven-member 



commission, and there are at the moment three of us who are on 
the Board. 

We have a time — they call it a time frame for 
action. The cases that are sent up have 60 days in which to be 
adjudicated. After that, they die by administrative law; 
nothing happens. Whatever the previous decision was is now the 
permanent decision. 

CHAIRMAN BURTON: Senator Lewis. 

SENATOR LEWIS: Mr. Burton, you have a heavy 
cross to bear. I was wondering, are you going to be able to 
overcome your blood lines? 

MR. BURTON: Actually sir, our Irish mother 
allowed as how that we can do it. We have the County of Cork, 
and we have our problems, but lineage ain't one of them. It's 
not one of them. We do not have the scotch in that it's not 
that when you're not a bastard. 

SENATOR KNIGHT: I don't have any questions. 

CHAIRMAN BURTON: Senator Hughes. 

SENATOR HUGHES: I'd like to move the nomination. 

I think this is harassment, and it's unnecessary. 

CHAIRMAN BURTON: Opposition in the audience? 

Do you want to introduce any members of your 
present — 

MR. BURTON: Before me sits my younger brother. 

CHAIRMAN BURTON: Call the roll. 

SECRETARY WEBB: Senator Baca. 

SENATOR BACA: Aye. 

SECRETARY WEBB: Baca Aye. Senator Hughes. 



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SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Five to zero. 

CHAIRMAN BURTON: Congratulations. 

MR. BURTON: Thank you very much. 

CHAIRMAN BURTON: Keep this for your — 

MR. BURTON: Thank you for that very charming 



curve ball. 



CHAIRMAN BURTON: — according to this, his 
public service is Clinton Reilly for Mayor, Storm Jenkins for 
Assembly, Milton Marks for Senate in 1967, Tom McClintock for 
Senate 2 000, and a Charter Member of the Quentin Kopp Fan Club. 

MR. BURTON: Thank you very much. 

CHAIRMAN BURTON: Senator Costa. 

SENATOR COSTA: Thank you very much. 

CHAIRMAN BURTON: Mr. Director designate. 

SENATOR COSTA: President Pro Tem, Members of the 
Senate Rules Committee, I know brevity's in order. 

I have the honor of introducing a person who 
needs no introduction because he has served with us over the 
years with fine distinction. 

The Governor, I think, chose, and fittingly so, 
to nominate Tom Hannigan, former Assembly Member, to the 



Director of State Water Resources, Department of Water 
Resources, a very important position in the State of California, 
given not only the history of water in this state, but also the 
importance as the state grows to plan adequately for our 
environment, for the growing population, and to maintain our 
agriculture economy. It's a difficult task that involves 
complexity of issues, and this gentleman next to me has the 
ability to take that task head on. I think he will be a problem 
solver. 

For all those reasons, I would urge your support. 
It is my honor to introduce him. Again, he needs no 
introduction, but it is again my honor as the Chairman of the 
Senate Ag. and Water Committee. 

This gentleman I got to sit next to as the Caucus 
Chairman when he was the Majority Leader for four-and-a-half 
years, and it's good to have him back. I hope you'll confirm 
his appointment as the Director of the State of California's 
Department of Water Resources. 

CHAIRMAN BURTON: Mr. Director. 

MR. HANNIGAN: Thank you, Senator Costa. I 
appreciate those kinds words. 

I, too, was appointed by the Governor to serve as 
the Director of the Department of Water Resources on the first 
of March. It's a challenge that I find exciting, and certainly 
a learning experience for me. 

I have visited individually with each of you and 
spent is sometime discussing the Department, and where I hope to 
take it in the next few years. 



I'd be happy to answer any questions that you 
might have. 

CHAIRMAN BURTON: Senator Lewis. 

SENATOR LEWIS: Just one question. 

MR. HANNIGAN: I'm not related to him. 
[Laughter. ] 

SENATOR LEWIS: We served together in the 
Assembly for 11 years. I was wondering if you have any 
recollection of how many times you ever uttered those words, 
"Move to lay the amendments on the table." 

MR. HANNIGAN: I lost count at some point. 

CHAIRMAN BURTON: The real question is, did you 
vote for pawn broker bill? 

Senator Hughes. 

SENATOR HUGHES: Mr. Hannigan, I'd like to know 
if you have a teaching credential because of the fact in my 
interview with you, you taught me a great deal about the 
Department of Water Resources. I know exactly what your job is, 
and I don't envy you. 

MR. HANNIGAN: You know, what I told you could be 
put on the head of a pin with respect to water. 

SENATOR HUGHES: How complicated it is. 

MR. HANNIGAN: The point is, I don't have a 
teaching credential. I failed the C-BEST test three or four 
times. 

SENATOR HUGHES: I was just joking. I call it 
the C-WORST anyway. 

But I am very thrilled that you are going to be 



with the Department. 

MR. HANNIGAN: Thank you, Senator. 

SENATOR HUGHES: I think this is one of our major 
resources that hasn't been handled totally properly, and we look 
forward to your assistance in this matter. 

MR. HANNIGAN: Thank you. 

CHAIRMAN BURTON: Senator Baca. 

SENATOR BACA: Tom, one of the questions that I 
have, as you're quite aware, the Department of Water Resources, 
one of the major responsibilities it has is with underground 
water . 

Is the underground water adequately being 
monitored in California? What can be done in that area? 

MR. HANNIGAN: Actually, my friend, Senator 
Costa, authored legislation in the '80s that created a voluntary 
groundwater management law. There are a number of water 
districts, some of them combined, throughout the state who are 
voluntarily managing their groundwater. 

The Department has a process called Bulletin 118 
which reviews groundwater management and makes recommendations 
to the Legislature. That bulletin has not been addressed since 
1980. One of the things I hope to do in the next year or two is 
upgrade Bulletin 118 and bring to you some observations, maybe 
some recommendations with respect to groundwater management. 

SENATOR BACA: Thank you, because that's an area 
that I'm very much concerned about. I know that in the Inland 
Empire, we have a lot of underground water. In some areas, it 
even surfaces up to the top in the postal offices in some of the 



other areas , so I • m very much concerned . Thank you . 

With that, I move the nomination. 

CHAIRMAN BURTON: Senator Knight. 

SENATOR KNIGHT: I don't have any questions. 

MR. HANNIGAN: Thank you. 

CHAIRMAN BURTON: Is there any opposition? 

Witnesses in support, just name and serial 
number . 

Thank you, Senator Costa. 

MR. GUALCO: Mr. Chairman and Members, Jack 
Gualco on behalf of our business, agriculture and water clients. 

Just want to say that Tom Hannigan's the right 
guy at the right time. Our clients have been impressed with his 
ability to pull disparate groups together, and we wish him every 
success and recommend him to you without any qualification 
whatsoever . 

CHAIRMAN BURTON: Next. 

MR. MACOLA: Mr. Chairman, Stephen Macola, Macola 
and Associates, representing Moulton Niguel Water District. 

I have the privilege of recommending Mr. Hannigan 
to this body without qualification. I wish both you and he 
well. 

CHAIRMAN BURTON: Where are we in the CAL-FED 
process? 

MR. HANNIGAN: We are we? We are close to having 
a preferred alternative on the street sometime later this month, 
including a draft EIR/EIS. And I hope decisions are made on 
that sometime by August. 



8 

CHAIRMAN BURTON: Then what happens? 

MR. HANNIGAN: Then we start the next phase of 
CAL-FED. 

CHAIRMAN BURTON: If you're lucky, your term will 
be finished before you have to? 

MR. HANNIGAN: I'm very supportive of CAL-FED, 
and many CAL-FED employees are using Department of Water 
Resources slots. 

But it is not totally under my control. It's a 
process. 

CHAIRMAN BURTON: What's our role in that? Do we 
have to prove anything? 

MR. HANNIGAN: Well, the state and the feds have 
an equal responsibility. 

CHAIRMAN BURTON: I'm talking legislative, 
Legislature. 

MR. HANNIGAN: You'll have one-half of — 
whatever is approved has to be approved by the Legislature and 
has to be approved by the legislative body at the federal level. 

CHAIRMAN BURTON: One other thing, and I think 
that SOR put a question, here but I think events have overcome 
the problem of PG&E on the hydro power divestiture. Does that 
come under you? 

MR. HANNIGAN: Yes, in a way. We have an 
interest in that process. We've talked to PG&E; we've talked to 
the rural county group and others about what may evolve. 

But it's conceivable that the Department of Water 
Resources, on behalf of the state, could acquire all or most of 



the PG&E assets at some point. That's a possibility. 

CHAIRMAN BURTON: Are you familiar, there was ten 
million in the May Revise? 

MR. HANNIGAN: Right, for the integrated storage 
investigation. It's a part of CAL-FED. 

CHAIRMAN BURTON: There is five million looking 
at sites reservoir? 

MR. HANNIGAN: That's correct. 

CHAIRMAN BURTON: We gave them ten million to 
look at it last year. 

MR. HANNIGAN: That's right. I saw a memo from 
the Department that said that process could cost as much as 45 
million dollars. 

CHAIRMAN BURTON: To look at it? 

MR. HANNIGAN: Yes. 

CHAIRMAN BURTON: How do you get on that pad? 

MR. HANNIGAN: I don't know. 

CHAIRMAN BURTON: Where would we find out what 
they did with the ten? 

MR. HANNIGAN: I can have that information for 
you, sure. 

CHAIRMAN BURTON: Could you give it to Mary 
Shallenberger? 

MR. HANNIGAN: Sure. Just deliver it to Mary. 

CHAIRMAN BURTON: Moved by Senator Baca. 
Secretary call the roll. 

SECRETARY WEBB: Senator Baca. 

SENATOR BACA: Aye. 



10 



SECRETARY WEBB: Baca Aye. Senator Hughes. 

CHAIRMAN BURTON: Do you want to introduce your 
family? 

MR. HANNIGAN: My family are all busy working. 
Couldn't make it. 

SECRETARY WEBB: Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Five to zero. 

CHAIRMAN BURTON: Congratulations. 

MR. HANNIGAN: I could introduce Nancy Fox, who 
was my first secretary in the building in 1978. 

[Thereupon this portion of the 

Senate Rules Committee hearing was 

terminated at approximately 10:18 A.M.] 
— ooOoo — 



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11 

CERTIFICATE OF SHORTHAND REPORTER 

I, EVELYN J. MIZAK, a Shorthand Reporter of the State 
of California, do hereby certify: 

That I am a disinterested person herein; that the 
foregoing transcript of the Senate Rules Committee hearing was 
reported verbatim in shorthand by me, Evelyn J. Mizak, and 
thereafter transcribed into typewriting. 

I further certify that I am not of counsel or 
attorney for any of the parties to said hearing, nor in any way 
interested in the outcome of said hearing. 

IN WITNESS WHEREOF, I have hereunto set my hand this 

1999. 





VELYN J. /MIZAK) 
Shorthand Reporter 



375-R 

Additional copies of this publication may be purchased for $3.00 per copy 
(includes shipping and handling) plus current California sales tax. 

Senate Publications 

1020 N Street, Room B-53 

Sacramento, CA 95814 

(916)327-2155 

Make checks payable to SENATE RULES COMMITTEE. 
Please include Stock Number 375-R when ordering. 



iSoo 

/to . \l 



DOCUMENTS DEPT. 
OCI -4 1999 

SAN FRANCISCO 
PUBLIC LIBRARY 

SENATE RULES COMMITTEE 



HEARING 



STATE OF CALIFORNIA 




STATE CAPITOL 

ROOM 112 

SACRAMENTO, CALIFORNIA 

WEDNESDAY, JUNE 9, 1999 
9:33 A.M. 



376-R 



f SENATE RULES COMMITTEE 
STATE OF CALIFORNIA 



HEARING 



STATE CAPITOL 

ROOM 112 

SACRAMENTO, CALIFORNIA 



WEDNESDAY, JUNE 9, 1999 
9:33 A.M. 



Reported by- 



Evelyn J. Mizak 
Shorthand Reporter 



11 



APPEARANCES 

MEMBERS PRESENT 

SENATOR JOHN BURTON, Chair 

SENATOR JOHN LEWIS, Vice Chair 

SENATOR JOE BACA 

SENATOR TERESA HUGHES 

SENATOR WILLIAM KNIGHT 

STAFF PRESENT 

GREG SCHMIDT, Executive Officer 

PAT WEBB, Committee Secretary 

NETTIE SABELHAUS, Consultant on Governor's Appointments 

WADE TEASDALE, Consultant to SENATOR LEWIS 

FELICE TANENBAUM, Consultant to SENATOR HUGHES 

CHRIS BURNS, Consultant to SENATOR KNIGHT 

MANNY HERNANDEZ, Consultant to SENATOR BACA 

ALSO PRESENT 

C. HUGH FRIEDMAN, Member 
Air Resources Board 

SENATOR DEDE ALPERT 

ALAN C. LLOYD, Member 
Air Resources Board 

SENATOR BYRON SHER 

TOMMY ROSS 

Southern California Edison 

SANDRA SPELLISCY 

Planning and Conservation League 



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ill 



JACK GUALCO 

California Council for Environmental Economic Balance 

PETER WEINER 

Paul, Hastings, Janofsky and Walker 

JOE CAVES 

Union of Concerned Scientists 

JULIE MALINOWSKI-BALL 

California Electric Transportation Coalition 

Independent Energy Producers Association 

JANET HATHAWAY 

Natural Resources Defense Council 

JOHN WHITE 

Sierra Club 

Clean Power Campaign 

TIM CARMICHAEL 
Coalition for Clean Air 

ROBERT C. HIGHT, Director 
Department of Fish and Game 

PETE PRICE 

Natural Resources Defense Council 

Center for Marine Conservation 

League for Coastal Protection 

United Anglers of Southern California 

JACK GUALCO 

Various Industry, Agricultural and Water Clients 

DAVID GARDNER, President 

California Fish and Game Wardens' Protective Association 

LYNN SADLER 

Mountain Lion Foundation 

JERRY MERAL 

Planning and Conservation League 

JOHN McCALL 

National Audubon Society 



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IV 



DANNY CURT IN 

California State Council of Carpenters 

STEPHEN MACOLA 

Moulton Niguel Water District 

JOE CAVES 

Nature Conservancy 

MARCY V. SAUNDERS, Chief 

Division of Labor Standards. Enforcement 

Department of Industrial Relations 

SENATOR JACKIE SPEIER 

ASSEMBLYMAN LOUIS PAP AN 

JIM KELLOGG 

United Association of Journeymen and Apprentices 

BOB BALGENORTH, President 

State Building and Construction Trades Council 

TOM RANKIN 

California Labor Federation, AFL-CIO 

JOE WINSTEAD 

California Pipe Trades Council 

ROBERT PERNELL 

California Council of Laborers 

DENNY CURT IN 

California State Council of Carpenters 

RICHARD GORDON, Member 

San Mateo County Board of Supervisors 

BARRY BROAD 

Teamsters 

Amalgamated Transit Union 

Engineers and Scientists 

Machinists 

Hotel and Restaurant Employees 

Food and Commercial Workers 



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ADRIENNE TISSIE, Mayor 
City of Daly City 

DAVID LANHAM 

Operating Engineers, Local 12 

WILLIAM C. WAGNER, Business Manager 
Operating Engineers, Local 12 

SCOTT STRAWBRIDGE, Executive Vice President 

Mechanical Contractors Association of 

Northern California, Central California, and Southern California 

MICHAEL MONAGAN 

Sheet Metal and Air Conditioning Contractors 

Western Wall and Ceiling Contractors 

ART CARTER 

State Sheet Metal Workers Association 

Western States Council of Sheet Metal Workers 

EDDIE BERNACCHI 

National Electrical Contractors Association 

WILLIAM NACK, Business Manager 

San Mateo County Building Trades Council 



VI 

INDEX 

Page 
Proceedings 1 

Governor ' s Appointees : 

C. HUGH FRIEDMAN, Member 

Air Resources Board 1 

Introduction and Support by 

SENATOR DEDE ALPERT 1 

Background and Experience 2 

Questions by SENATOR LEWIS re: 

California Requirement that 10 Percent 

Of Vehicles be Zero or Low Emission 

By Year 2003 5 

Opinion of Mandatory Ride Sharing 

Requirements 6 

Work with San Diego Padres 6 

Questions by SENATOR BACA re: 

Pollution Concentrations High in 

Minority and Low Income Areas 7 

Air Pollution that Comes from 

Outside Areas 8 

Motion to Confirm 9 

Committee Action 10 

ALAN C. LLOYD, Chair 

Air Resources Board 10 

Introduction and Support by 

SENATOR BYRON SHER 10 

Background and Experience 11 



Vll 



Questions by SENATOR LEWIS re: 

Regulatory Mistakes that Might 

Have Been Made while at South 

Coast Air Quality Management 

District 14 

Honda's Announcement to Discontinue 

Manufacturing Their Zero Emission 

Vehicles 15 

Viability of the Year 2003 Goal 16 

Best Range and Cost of Low Emission 

Vehicles under Current Technolgoy 17 

Questions by CHAIRMAN BURTON re: 

Honda ' s Decision 17 

Request to Report Back to Chair regarding 

Honda ' s Action 19 

Questions by SENATOR BACA re: 

Impact of Smog Checks on Older Vehicles 19 

Trucking Industry and Diesel Fuel Issue 21 

High Pollution in Minority and Low 

Income Areas 22 

Plans to Relive Inland Empire of 

L.A. 's Bad Air 23 

Motion to Confirm 24 

Witnesses in Support: 

TOMMY ROSS 

Southern California Edison 24 

SANDRA SPELLISCY 

Planning and Conservation League 24 



Vlll 



JACK GUALCO 

The Gualco Group 24 

PETER WEINER 

Paul, Hastings, Janofsky and Walker 24 

JOE CAVES 

Union of Concerned Scientists 24 

JULIE MALINOWSKI-BALL 

California Electric Transportation Coalition 

Independent Energy Producers Association 24 

JANET HATHAWAY 

Natural Resources Defense Council 24 

JOHN WHITE 

Sierra Club 

Clean Power Campaign 25 

TIM CARMICHAEL, Director 

Coalition for Clean Air 25 

Questions by CHAIRMAN BURTON re: 

Playing Soccer 25 

Committee Action 26 

ROBERT C. HIGHT, Director 

Department of Fish and Game 2 6 

Introduction and Support by 

CHAIRMAN BURTON 2 6 

Background and Experience 2 8 

Questions by SENATOR LEWIS re: 

Approach to be Used for 

Endangered Species Act 28 

Questions by CHAIRMAN BURTON re: 

Commission's Position on Fish 

Wildlife Versus Fish and Game Bill 29 



IX 



Comments on Northern Pike in 

Lake Davis 29 

Questions by SENATOR HUGHES re: 

Sabotage Efforts at Lake Davis 31 

Questions by SENATOR BACA re: 

Problems with Delhi Fly on Endangered 

Species List 32 

Motion to Confirm 33 

Witnesses in Support: 

PETE PRICE 

Natural Resources Defense Council 

League for Coastal Protection 

Center for Marine Conservation 

United Anglers of Southern California 33 

JACK GUALCO 

The Gualco Group 33 

DAVE GARDNER, President 
California Fish and Game Wardens 

Protective Association 34 

LYNN SADLER 

Mountain Lion Foundation 34 

JERRY MERAL 

Planning and Conservation League 34 

JOHN McCALL 

National Audubon Society 34 

DANNY CURT IN 

California State Council of Carpenters 34 

STEPHEN MACOLA 

Moulton Niguel Water District 3 5 

JOE CAVES 

Nature Conservancy 3 5 

Committee Action 3 5 



MARCY V. SAUNDERS, Chief 

Division of Labor Standards Enforcement 

Department of Industrial Relations 3 5 

Introduction and Support by 

SENATOR JACKIE SPEIER 3 5 

Statement in Support by 

ASSEMBLYMAN LOUIS PAPAN 37 

Background and Experience 37 

Questions by CHAIRMAN BURTON re: 

Getting into Building Trades 41 

Questions by SENATOR LEWIS re: 

Objectivity in Matters Relating to 

Labor Law and Unions 42 

Examples of Differences from Union's 

Views on Public Policies 42 

Non-union Employees Involved in 

Project Labor Agreement at San Francisco 

Airport 42 

Ratio of Union Versus Non-union Workers 

At Project 43 

Supreme Court Case Pending 43 

Dropping of Minority Prime Contractors 

And Women Enterprises 44 

Short-lived Strike at Airport 45 

Questions by SENATOR BACA re: 

Most Important Challenges Facing 

DLSE Currently 46 

Questions by SENATOR LEWIS re: 

PLA Contracts Driving up Construction Costs ... 47 

Motion to Confirm 47 



XI 



Witnesses in Support: 

JIM KELLOGG 

United Association of Journeymen and Apprentices 49 

BOB BALGENORTH, President 

State Building and Construction Trades Council 49 

TOM RANKIN 

California Labor Federation, AFL-CIO 50 

JOE WINSTEAD 

California Pipe Tradfes Council . . 50 

ROBERT PERNELL 

California State Council of Laborers 50 

DANNY CURT IN 

California State Council of Carpenters 51 

RICH GORDON, Member 

San Mateo County Board of Supervisors 51 

BARRY BROAD 

Teamsters 

Amalgamated Transit Union 

Engineers and Scientists 

Machinists 

Hotel and Restaurant Employees 

Food and Commercial Workers 51 

ADRIENNE TISSIE, Mayor 

City of Daly City 51 

DAVID LANHAM 

Operating Engineers , Local 12 51 

WILLIAM C. WAGNER, Business Manager 

Operating Engineers , Local 12 51 

SCOTT STRAWBRIDGE, Executive Vice President 
Mechanical Contractors Association of 

Northern, Central and Southern California 52 

MICHAEL MONAGAN 

Sheet Metal and Air Conditioning Contractors 

Western Wall and Ceiling Contractors 52 



Xll 



EDDIE BERNACCHI 

National Electrical Contractors Association 52 

WILLIAM NACK, Business Manager 

San Mateo County Building Trades Council 52 

Committee Action 53 

Termination of Proceedings 53 

Certificate of Reporter 54 



P-R-O-C-E-E-D-I-N-G-S 
— ooOoo — 

CHAIRMAN BURTON: We have several gubernatorial 
appointees. Here first, C. Hugh Friedman, Member, State Air 
Resources Board. 

Senator Alpert. 

SENATOR ALPERT: Good morning. 

I ' m honored to be here to introduce one of my 
constituents, a person who has been a friend of mine for a 
number of years, a friend of my husband's, I think, for probably 
about 25 years. 

Hugh has a marvelous professional background as a 
renowned attorney and as a law professor at USD. But I think 
even more important than his professional credentials is the 
fact that all of his adult life, he has been involved in public 
service. This isn't his first opportunity to serve, but 
everytime he has been called upon, he has come to serve. I 
think of his service particularly on the State Board of 
Education and the work that he did. 

I was telling him one day that one of the reports 
that I read, I thought that many of the things they were saying 
in the '80s, if we'd the only taken heed and paid attention, we 
might not be in the problems that we have here in the '90s. 

He is just an outstanding person, a very decent 
man, and a very talented man, a very bright man, and we would be 
very, very lucky to have him serve on the Air Resources Board. 
And I'm just honored to be here today to introduce him to all of 
you. 



MR. FRIEDMAN: Thank you, Mr. Chairman. 

Thank you very much, Senator Alpert. I count you 
among my true and good friends, and I really appreciate your 
taking the time in your busy schedule to introduce me to your 
colleagues. 

Chairman Burton, Members, I'm pleased to appear 
before you today as you consider my confirmation to the Air 
Resources Board. As you know, Governor Davis appointed me to 
serve as one of the two public members of the Air Resources 
Board, and I consider it both a great privilege and a great 
responsibility to do so. 

I'm committed fully, wholeheartedly to the 
Governor's environmental objectives, and I understand that the 
Air Resources Board's responsibility, first and foremost is to 
protect public health. I'm glad that I had the opportunity at 
my first meeting in April to vote on the continuation of the 
ARB's landmark Children's Health Study, And the issue of air 
pollution on growing children and on infants is terribly 
important, and we need to know a lot more about it in order to 
deal with it. 

In terms of my own background, I am essentially 
an educator and a lawyer. I've been practicing, teaching, 
writing about, business law, particularly corporate law, for the 
past 4 years. And in my private practice over the many years, 
I have represented and guided clients and hope to educate them, 
small businesses and large, through a wide range of business 
regulations, and notably including environmental laws and 
regulations, and related processes. So, I am interested in 



assuring fairness in the regulatory process. 

And I also believe that education is the key to 
common ground. Once people see how and why their activities 
pollute the air, and once they understand why a certain 
environmental rule has been put into effect, how it relates to 
the air they and their families breathe, then I think the lion's 
share of resistance tends to fall away. Generally then people 
are willing to talk about how specifically we can together 
accomplish our common goal of a clean and healthful environment. 

I found this to be particularly true when working 
with small businesses that are facing regulations sometimes for 
the first time. I've also found fair process in education to be 
keys to success in those prior undertakings, as Senator Alpert 
referred to when I had the privilege in the past of serving our 
state as member of the Automobile Accident Study Commission some 
years ago, appointed by then-Governor Reagan, later as Chair of 
the California Securities Regulatory Reform Commission, 
appointed by the administration of Governor Brown, and then as a 
Member and President of the California State Board of Education, 
and more recently as a Member of your own Senate Commission on 
Corporate Governance, Shareholder Rights and Securities 
Transactions, chaired by Senator McCorquodale, and later by 
Senator Killea. 

And as Chairman Lloyd indicated in his letter to 
the Committee, one of his goals, which I share wholeheartedly, 
is to continue to improve upon the Air Resources Board's small 
business assistance programs. I hope to contribute to that in 
some way. 



I served on the President's most recent White 
House Conference on Small Business Commission which gave me a 
much better understanding of the problems that small business 
faces in meeting and satisfying regulations, and it's led to 
initiatives to reduce red tape and streamline government, many 
of those at the federal level, which you have already done here 
at the state level. 

But there may always be room for additional 
improvement, and I'd like to focus, among other things, on 
financing aspects of pollution control to better assist business 
and others whose activities with good, sound, credible science, 
we determine are polluting, help them comply and comply soon. 

As a public member, I believe I have an 
obligation, and I will honor it, to express the public's 
unwaivering commitment to clean and healthful air. I believe, 
though, that determining and identifying the sources of air 
pollution, we must do that based on very sound science. And I 
think it's got to be based on studies that are not highly 
controversial, or else we should go slow. 

I also think that we should do this in 
partnership with those whose activities we identify as the 
sources of pollution, and we should try to find with them 
solutions which will mitigate or eliminate the problem that are 
the least damaging to legitimate activities. 

On the other hand, we always have to set 
ambitious goals for ourselves and for the regulated community. 
For example, I don't believe we would have ever gotten the lead 
out of gasoline or out of paint without a strong push from 



government and without some very sound science and public health 
information to back it up. 

As a Member of Air Resources Board, I intend to 
keep learning. I intend to do my best to enhance the education 
of others as to the importance of our I endeavor, and I will at 
all times endeavor to maintain a even-handed, balanced approach. 

I appreciate this opportunity to appear before 
you, and will try to answer any questions. 

CHAIRMAN BURTON: Senator Lewis. 

SENATOR LEWIS: Good morning, Mr. Friedman. 

MR. FRIEDMAN: Good morning, Senator. 

SENATOR LEWIS: You mentioned the need to make 
sure that regulations are based on sound science. I certainly 
concur . 

I was wondering, what do you think of the 
requirement in law relative to the ten percent of the vehicles 
in California by the year 2003 being low or no emission 
vehicles? 

MR. FRIEDMAN: Do I think that's a practical, 
realistic goal? 

I think it's a goal that is going to be reviewed 
technologically by the Board, as I understand it, next year, in 
the year 2000, to see where we are. 

I think we ought to hold to that at this point 
without further information. 

There are a lot of advances, wonderful 
technological advances that I'm just beginning to learn about. 
The hybrid, the fuel cell; others that can extend battery life. 



There are, indeed, studies going on that may suggest that there 
are various ways of extending battery life and addressing the 
problems that presently seem to blight the hope of the purely 
electric car. 

SENATOR LEWIS: The South Coast Air Quality 
Management District is once again thinking about expanding 
certain parts of their ride sharing program. I guess they're 
talking now about a mandatory ride sharing program to sporting 
events, and those kind of activities. 

What's your thought on that kind of a regulation? 
What ' s your thought on mandatory ride sharing programs in 
general? 

MR. FRIEDMAN: Well, it's a congestion control 
device, but I don't believe mandates are the way to go, to be 
very frank about it. I think that it's always better if you can 
get voluntary ride sharing and car pooling, and provide the 
appropriate incentives and the proper education to educate the 
populace. I don't think that the mandates are appropriate. 

SENATOR LEWIS: Last question. I see you've done 
some work for the San Diego Padres. 

MR. FRIEDMAN: Yes, I had the privilege of 
negotiating the National League franchise for San Diego in those 
early days. 

SENATOR LEWIS: When's Tony Gwynn going to be 
healthy again? 

MR. FRIEDMAN: I wish we knew. 

CHAIRMAN BURTON: Senator Baca. 

SENATOR BACA: Hugh, just a couple of questions. 



In the air, I guess, research has been done that has found 
pollution to be high and concentrated, especially in low income 
and minority areas. The pollution arises from waste 
incinerators, chemical plants, freeways, farm pesticides. 

Do you have any ideas how to improve the air 
quality in low income areas? 

MR. FRIEDMAN: I think I've learned that this is 
a serious and important question that really devolves on what is 
being called environmental justice. And I think that's an 
appropriate label . 

To the extent that there are individual 
communities that seem to have more pollution, and they 
frequently tend to be areas that are lesser income, they're 
caught in a vicious cycle, and there's got to be remedies that 
we can fashion somehow as a civilized society. 

On the other hand, I think we need to know more 
about it. I believe there are studies under way to assess the 
aggregate cumulative effect of air pollution in individual 
particular communities that have been identified. And I think 
we need to get that data, and then wrestle with this and come to 
grips with it, and find some solution. 

SENATOR BACA: I appreciate that, because we 
really need to address it, especially as it impacts a lot of 
those areas that are low income and have no choice because of 
the af fordability of their homes, but yet its impact on them and 
their children are being affected tremendously. 

And the same thing also happens in my immediate 
area in the San Bernardino area as far as the air quality, as 



8 

you know. I guess my concern is that a lot it comes from the 
basin, from the L.A. area, reflects on the mountains and comes 
back into our area. 

What suggestions, or how can you help us in 
dealing with the particular problems, since we're actually 
having to pay the additional price in the Inland Empire, 
especially the San Bernardino area, based on where we're 
located, next to the mountains? 

We have a lot of smog alerts for a lot of our 
children that are impacted, so I'd like you to, hopefully, in 
your endeavors, to look at and address that, and to see how we 
might be able to commit by coming together in helping businesses 
in those areas that are being penalized for producing some of 
it, when in fact it's not all of their fault. Some of it's 
coming from the L.A. Basin. 

MR. FRIEDMAN: I agree completely, Senator. I 
think the upwind areas, which are the sources of pollution, to 
the extent that they are affecting the downwind communities, 
there's got to be at least some administrative process or relief 
that can be provided. 

I'm not sure that there's any district that, in 
and of itself, is absolutely free of being its own source of 
pollution. Everybody drives cars, and there are always some 
manufacturers and other things. 

But where the pollution is disproportionate, and 
it's due to the prevailing winds and so forth, as in your area 
that you've described — 

SENATOR BACA: Maybe we should put a big blower 






and just blow it back into the L.A. area. 

SENATOR KNIGHT: Just don't blow it over the 
hills. 

CHAIRMAN BURTON: Senator Knight. 

SENATOR KNIGHT: I was just going to ask if that 
was a similar situation between San Francisco and Sacramento, as 
far as the pollution blowing. 

CHAIRMAN BURTON: Would you like to introduce any 
family members that might be present, so she might get back and 
cause mischief in the Governor's Office? 

MR. FRIEDMAN: It would be my privilege to 
introduce my wife, my life partner, Lynn Shank. 

CHAIRMAN BURTON: There have been some not 
necessarily complaints but comments that after certain people 
cook a lot of goulash, that the paprika wafts into the San Diego 
basin and causes a lot of eye problems. 

Has that been coming from anywhere in your 
neighborhood? 

MR. FRIEDMAN: When some of them are doing the 
cooking, it'll waft all if way over to Yugoslavia and below. 

[Laughter. ] 

CHAIRMAN BURTON: Can we have just witnesses in 
support come identify themselves, please. 

Good for you; you didn't bring a passle. 

SENATOR HUGHES: I'd like to move the nomination. 

CHAIRMAN BURTON: Moved by Senator Hughes, call 
the roll. 

Opposition. 



10 

If he thought there was opposition, he would have 
brought a carload of people. 

We appreciate what Senator Costa said in 
introducing Director Hannigan: brevity. 

Call the roll, please. 

SECRETARY WEBB: Senator Baca. 

SENATOR BACA: Aye. 

SECRETARY WEBB: Baca Aye. Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Five to zero. 

CHAIRMAN BURTON: Congratulations. 

Next is Dr. Alan C. Lloyd, Chair of the State 
Resources Board. 

You may proceed, Doctor. 

DR. LLOYD: Good morning, Chairman Burton and 
Committee Members. I'm pleased to be here this morning as you 
consider me for confirmation for the Air Resources Board. 

CHAIRMAN BURTON: I think Senator Sher wanted to 
make a brief introduction. 

SENATOR SHER: Excuse me for my tardiness, sir. 

Well, as Chair of both the policy committee and 
the Budget subcommittee with oversight jurisdiction over the Air 



11 

Resources Board, it's my pleasure to express my strong support 
for the confirmation of Dr. Alan Lloyd as the Chair of the 
Board . 

Dr. Lloyd is a relative rarity in state 
government. He has spent his entire professional life, you 
might say, in training for this appointment. He most recently 
served as the Executive Director of the Energy and Environmental 
Energy Center for the Desert Research Institute at the 
University and community college system of Nevada Reno. 

Previously, he was the Chief Scientist at the 
South Coast Air Quality Management District from 1988 to 1996, 
where he advised the district on scientific and technical 
research and development findings to further reduce air 
pollution. During his service at the district, my office worked 
closely with him in fashioning laws such as the California Clean 
Air Act in order to ensure that air pollution control was 
accomplished in a manner which had both industry and 
environmental support. 

Dr. Lloyd has given numerous presentations to 
international audiences, focusing on the viable future advanced 
technology and renewable fuels, with attention to the urban air 
quality challenges that face California. 

In summary, Dr. Lloyd is perhaps the best 
qualified Chair, both technically and politically, that the 
Board has had in many years. I urge the Committee to approve 
the confirmation. 

DR. LLOYD: Thank you very much, Senator Sher, 
for that kind introduction. I've admired your legislative 



12 

career for many years, and I'm proud to have the opportunity to 
work closely with you. 

With your permission, Mr. Chairman, I'd like to 
continue. 

I'd like to introduce my wife, Diana, who is 
equally glad to be here this morning. Diana and I have made our 
home in California since we moved, immigrated, from Wales in 
1969, except for the past three years while I was at the Desert 
Research Institute in Reno. I know I speak for both of us when 
I say it is good to be back in California. 

Being selected by Governor Davis for this 
important position is a tremendous honor and privilege. With 
the Senate's approval, I look forward to serving him and the 
people of California for the next several years. 

I'm an atmospheric chemist by training, so I'm 
well prepared for the technical challenges of this position. 
Good science is absolutely crucial to what we do. 

Let me say that my professional experiences to 
date have given me a fair amount of insight into the policy and 
political challenges facing the Air Resources Board. The South 
Coast Air Quality Management District, where I served as Chief 
Scientist for eight years, faced many of the same issues, and I 
learned a lot from my time there, both technically and 
politically. 

Last week, I submitted a letter to the Committee, 
outlining my goals as Chairman of the Air Resources Board. In 
the short term, those are to implement the Governor's MTBE 
decision. We have several tasks to complete on this before the 



13 

end of this year, including a June hearing on gasoline labeling, 

We need to develop peer relationships with my 
colleagues in State service so we can work through overlapping 
inter-agency issues. 

I want to create a focus on community health and 
children's health at the Board, which I've already begun to do. 
And I think Professor Friedman reflected both he and my concern 
in that area. 

We need to continue our business assistance and 
regulatory steamlining program so we can put the least burdens 
on the regulated community and still get the maximum possible 
benefit of the air quality rules. 

Over the longer term, my goals are to stimulate 
technology advancement in all sectors, such as the Governor and 
the Air Resources Board are doing with the California Fuel Cell 
Partnership. This approach not only helps air quality, but can 
pay economic dividends in the state in the form of new jobs and 
investments . 

I want to keep reducing emissions from vehicles 
and other mobile sources to the ultra low zero emission levels. 
We are way ahead on automobiles, but we need to focus some of 
the other categories. 

I want to achieve an even higher level of 
scientific and technical excellence of the Board by bringing in 
outside experts more regularly, and do everything I can to help 
California's 35 local air pollution control districts to do 
their job effectively. 

Since my appointment by Governor Davis on 



14 

February the 18th, I've had the opportunity to talk with many of 
you and other Members of the Legislature about your goals and 
concerns. That has been extremely informative, and it's a 
dialogue I hope to continue during my tenure as Chairman of the 
Air Resource's Board. 

There is a wealth of talent in this state in both 
the public and private sector. My three years away from 
California makes me have an even greater appreciation for this 
fact. 

In addition, there is a deep commitment to air 
guality issues throughout our society. I must say, this makes 
the job of protecting public health much easier and far more 
gratifying. I'm honored to have so many qualified people as 
partners in this effort. 

Those are my formal remarks. I'd be open to 



questions. 



CHAIRMAN BURTON: Senator Lewis. 

SENATOR LEWIS: Dr. Lloyd, welcome to the 



Committee. 



DR. LLOYD: Good morning, Senator. 

SENATOR LEWIS: You were the Chief Scientist at 
South Coast for eight years. One of the things, at least 
occasionally sometimes we learn from past mistakes. 

I was wondering, during the eight years in that 
position, did you witness any what you now in retrospect would 
consider are regulatory mistakes that were made at the South 
Coast District? 

DR. LLOYD: In all honesty, Senator, I 



15 

witnessed — one thing I witnessed first-hand, I learned a lot 
from, and that is the power of the Legislature, and the need to 
respond to the people and to the legislative branch. 

I think one of the areas that I felt — again, 
I'm a scientist, so I like to be able to quantify things where 
ever possible — and I did find that our mandatory ride sharing 
program was one which was not paying dividends. It was mostly a 
congestion management issue. So, that's one where I thought 
probably it was not the best way to go. 

I also remember a poll conducted in your county 
which the people basically are saying, "We're willing to pay for 
some advanced technology, we're willing to clean up the air, but 
let us have the freedom; don't dictate our life styles." 

CHAIRMAN BURTON: The people in Orange County 
said they're willing to pay for something? 

[ Laughter . ] 

SENATOR LEWIS: Anything but your level of 
taxes. 

I wanted to ask you, recently Honda has announced 
that they're discontinuing the manufacture of their zero 
emission vehicle. 

DR. LLOYD: EV Plus. 

SENATOR LEWIS: That's right. 

In your opinion, is that in violation of any kind 
of a contractual arrangement with ARB? 

DR. LLOYD: We are very concerned and, I think, 
quite upset about the announcement by Honda. However, it did 
not violate an agreement. 



16 

There was an agreement with the major 
manufacturers that they would produce a percentage of vehicles 
ahead of 2003, based on their sales in California. I think, as 
I recollect, Honda's number was around 270-280. They actually 
produced 3 00, so they actually produced these vehicles early, so 
they fulfilled that commitment. 

But on the other hand, we were very concerned 
about the message it sent to the community, to our efforts to 
clean up the air, and to those people making significant 
investments in electric vehicle technology. So as a result, we 
are going to be visiting Honda. We're in discussions with them 
and also the other manufacturers to make sure that the 
agreements under the Memorandum of Understanding have been 
fulfilled, and they are making progress, and a serious 
commitment to the 2003 requirements. 

SENATOR LEWIS: In view of the Honda decision, 
what does that tell you about the viability of the 2003 date, 
goal? 

DR. LLOYD: I think at this time it tells me in 
one way that they were early in their commitment, so they were 
able to produce electric vehicles which the customers really 
accepted. The people I know who've driven them, including 
myself, have been very pleased with that. 

I think on the other hand, Senator, I realize 
it's a challenge and certainly for some of the battery 
technology. As Professor Friedman said, we are having a 
technology review next year, and I can promise that we will have 
a thorough evaluation of the status of technology in that arena. 



17 

The good thing, however, is that we've seen 
tremendous advances in the electric vehicle drive train, 
aerodynamics, et cetera. We've seen the fuel cells. So, it is 
a whole family of vehicles now coming to the fore which do not 
completely rely on the range of the battery. As an example, we 
could have a hybrid battery fuel cell vehicle which would be 
zero emission. That's fine with us. 

SENATOR LEWIS: Under current technology, what is 
the best range that can now be — 

DR. LLOYD: Again, I think if you look at the 
pure electric vehicle as the battery electric vehicle, you run 
about 150 miles with the best batteries. If you look at a fuel 
cell vehicle, which can be zero emission, the ones that we saw 
here at the Capitol with the Governor a couple of months ago, 
they can get 300-350 miles range, and they're still zero 
emission vehicles. 

SENATOR LEWIS: What will be the cost of those 
particular vehicles that you just referenced? 

DR. LLOYD: I think as any early technology we've 
seen, as we've seen with high definition television, the cost at 
early introduction are very high. 

And clearly, what we're hoping for, as the 
production comes up there, the cost will go down. Early on, 
they're going to be more expensive. 

SENATOR LEWIS: Thank you. 

CHAIRMAN BURTON: So, Honda had an agreement to 
sell so many of these cars by a certain date or produce them. 
They did it early and got out? 



18 

DR. LLOYD: They got out of their commitment — 

CHAIRMAN BURTON: I understand that. They 
fulfilled their commitment and got out. Does that say, like, to 
me, that it was economically unfeasible to be selling these 
cars? 

In other words, if they were making a buck in 
doing it, they probably won't have gotten out. 

Is there any reason why they discontinued the 
deal? 

DR. LLOYD: I think, Senator, that they thought 
they fulfilled their obligation. 

CHAIRMAN BURTON: I know that, but in other 
words, it was like, pay the five dollars for the parking ticket 
and get me out of here. And at least to me, the important thing 
is not that you'll meet the obligation and move on, but if the 
cars would have — if there would have been a market, if they 
would have made a buck, they wouldn't have felt, "Well, gee, 
this is just something we have to do; this is the price of 
admission to the show." 

DR. LLOYD: I will know more about that, Senator, 
when I have discussions with Honda. My expectation, however, is 
that at this time they were looking at what they did early on, 
and then looking at the 2003 requirements. 

CHAIRMAN BURTON: It's kind of idle curiosity, 
but I'd be interested to know, say, they were able to do it, and 
I guess they figured this is going to be a pain in the neck for 
us; let's do it. It's like going to the dentist, get it done 
now and then we'll go do something else. 



19 

I would hope that maybe they got it out of the 
way now, and then they're going to move in, because I have some 
friends that they're re-doing the electric vehicle, natural gas 
vehicle, or riding a bicycle. 

Do you know Ed Begley? 

DR. LLOYD: Yes. 

CHAIRMAN BURTON: Sunday, he rode his bike from 
Studio City to Malibu. 

I would just think that it'd be interesting to 
know what their thought process was. In other words, whether 
they figured that this type of vehicle makes good business sense 
to do it, or it was just like the price of admission, and they'd 
just as soon written a check to the cancer fund and gotten out 
of it. 

That's what it tells me if they met mark early 
and left, it meant it's just something we've got to do. Let's 
do it and get it over with. 

DR. LLOYD: Senator, I hope to accomplish that in 
my discussions, and I will report back. 

CHAIRMAN BURTON: Let us know. 

Senator Baca. 

SENATOR BACA: Thank you. 

Alan, I have a couple of questions, one in the 
area that we've just been discussing on emissions. As you know, 
smog checks have been a problem. I don't know if it does fall 
under some of your jurisdiction or what suggestion you would 
have, especially as it impacts a lot of us that have older 
vehicles that are going there. It seems like the cost is always 



20 

high, and it's hard to regulate whether they do need the smog 
check in terms of the emission. 

What can possibly be done, because that is a cost 
factor, and it continues to go up? And a lot of seniors and 
others are afraid, like anything else, because they're always 
asked to repair their vehicle for something else that it doesn't 
really need, and yet, what impact does it really in the air 
emission that the car may be producing, or not, to comply? 

Is there any suggestions or ideas that you're 
looking at in reference to what can be done there, or should we 
even look at a centralized station where we go that we can 
trust, that they're actually going to give us exactly what we 
need and fix what needs to be done. 

DR. LLOYD: Senator Baca, I'm pleased you brought 
that up. It's a very tough issue, and as we've seen in the 
debate in the Legislature in the last few days, I think there 
has been some help to some of the lower income people to provide 
some additional benefit. 

But overall, I think, one of my concerns in 
coming into this position is to look at smog check to see what 
emission reduction it's getting. And the base program seems to 
be doing reasonably well. 

The enhanced program is falling far short. 

So, one of my goals as Chairman is to work with 
as many people, including outside experts, to come in and 
convene a group to look at how we address this issue. To me, in 
these days of the technology, there has to be a better way, a 
more effective way, a less burdensome way, of accomplishing the 






21 

emission reductions. 

We're putting a lot of faith in the on-board 
diagnostics tool for newer vehicles. I think that's going to be 
a tremendous help and, hopefully, get away from that. 

SENATOR BACA: Right. We can't afford to buy a 
new vehicle every time just to make sure that it passes the smog 
check . 

DR. LLOYD: That's why I think one of the things 
we're going to try to do is to pay more attention to the vehicle 
as it ages in how we clean up those emissions, how we help the 
people clean up those omissions. 

I don't have any easy answer at this time. It's 
a tough job, but I do commit to trying to find a better way of 
cleaning up those emissions. 

SENATOR BACA: Another question. In our area, 
the Inland Empire, has a trucking industry that's moving into 
that area, so diesel fuel does create a lot of problems in the 
area. Hopefully, we can work in hand to also help in that area. 

Do you have any suggestions or ideas in terms of 
dealing with the trucking industry as it pertains to diesel fuel 
emission? 

DR. LLOYD: Again, Senator, that's — the whole 
diesel issue is a very challenging program for us. I think we 
want to work very closely with the trucking industry. 

As you know, since diesel been identified as a 
toxic air contaminant, it's our job to protect the general 
public from exposure. 

On the other hand , I'm very heartened that there 



22 

are significant technical improvements under way so we can 
reduce exposure to diesel particulates. 

We understand fully that we're not intending to 
ban diesel fuel. They play a vital part in our economy with the 
trucking and the agricultural area. 

On the other hand, we need to pay more attention 
to cleaning up their emissions so that people can actually go 
about their business, and yet, not be subjecting the general 
population to significant toxic air contaminants. 

SENATOR BACA: As I asked Hugh earlier, the 
recent research indicates that air pollution is found higher and 
concentrated in lower income and minority areas. This pollution 
arises from waste incinerators, chemical plants, freeways, and 
farm pesticides. 

Do you have any ideas to improve the quality in 
low income areas? 

DR. LLOYD: That's an area that I'm also putting 
specific focus on at my office. In fact, I've brought on a 
community health advisor to give more attention to community 
health, to see where the cause of those pollutants are, what the 
concentrations are, and to design programs there. 

We are going to be working not only to understand 
the problem, but also to try to curtail those emissions. 

Of course, our programs on curtailing motor 
vehicle emissions, both in the heavy duty and the light duty, is 
also going to play into that very heavily. 

SENATOR BACA: Finally, as you know, we get most 
of the bad air from the L.A. Basin area that hits our mountain, 



23 

reflects back in our area. Hopefully, you could look at helping 
our area. 

What are you committed to do to basically relieve 
not only the business people, but the community in that area 
because we do have a lot of smog alerts that impact our children 
in the Inland Empire based in the that area. We are not 
creating it; it's created out of the L.A. area. Hopefully, you 
can look at developing a plan that will relieve not only the 
business in that area, but the community in terms of the air 
quality there? 

DR. LLOYD: Senator, that's a very important 
issue. Having spent the first six years of my time in 
California in Riverside, and for years Los Angeles saying, 
"There is no pollution moving east," I'm very sympathetic to 
that issue. 

We've conducted many studies over the years to 
demonstrate this transport in various parts of California, and 
particularly in South Coast, so we are now looking at technical 
ways in which we control the emissions upwind, which we're 
doing, as well as in your area, but at the same time 
administratively looking at ways in which we can recognize that, 
in fact, a lot of your pollution is due to the transported 
pollutants from upwind areas. So, we're trying to give you 
recognition for that transported part. 

On the other hand, of course, we are also 
encouraging all the 35 air pollution control districts in the 
state to curtail their local emissions as well as looking at the 
transport side. 



24 

SENATOR BACA: Thank you. 

Move the nomination. 

CHAIRMAN BURTON: Any witnesses in support 
identify themselves, please. 

MR. ROSS: Mr. Chairman and Members, Tommy Ross, 
Southern California Edison. 

For the sake of brevity, I'll fold up my 
statement and just say that we support his confirmation. 

MS. SPELLISCY: Good morning, Mr. Chairman and 
Members. Sandra Spelliscy with the Planning and Conservation 
League, pleased to support the nomination. 

MR. GUALCO: Mr. Chair and Members, Jack Gualco 
on behalf of the California Council for Environmental Economic 
Balance in support of Dr. Lloyd. 

MR. WEINER: Mr. Chairman and Members, Peter 
Weiner, Paul, Hastings, Janofsky and Walker, and we represent 
various manufacturers and regulated entities in support of 
Dr. Lloyd. 

MR. CAVES: Joe Caves on behalf of the Union of 
Concerned Scientists, happy to have such an eminent scientist in 
this position. 

MS. MALINOWSKI-BALL: Julie Malinowski-Ball, 
representing the California Electric Transportation Coalition 
and the Independent Energy Producers Association. 

We're very excited about this appointment and 
look forward to working with Dr. Lloyd in the future. 

MS. HATHAWAY: Janet Hathaway, representing the 
Natural Resources Defense Council. 



25 

Very honored to have such a great person in this 
position. 

MR. WHITE: John White, representing the Sierra 
Club and the Clean Power Campaign. 

And I'm just thrilled to be here for my friend, 
Alan. Thank you. 

MR. CARMICHAEL: Good morning, Mr. Chairman and 
Members of the Committee, Tim Carmichael, the Director of the 
Coalition for Clean Air based in Los Angeles. 

Happy to support the nomination and confirmation 
of Dr. Lloyd. 

CHAIRMAN BURTON: Any opposition, representative 
of the Coalition for Dirty Air. 

[ Laughter . ] 

CHAIRMAN BURTON: There was one question that 
came from one of our minority staff. They were wondering if in 
your youth back in Great Britain if you ever were a soccer 
hooligan? 

DR. LLOYD: Actually, I was a rugby player. I 
think the saying there was that rugby was a hooligan's game 
played by gentlemen, and soccer was, I guess, a gentleman's game 
played by hooligans. 

CHAIRMAN BURTON: You did introduce your family. 

Moved by Senator Baca, call the roll. 

SECRETARY WEBB: Senator Baca. 

SENATOR BACA: Aye. 

SECRETARY WEBB: Baca Aye. Senator Hughes. 

SENATOR HUGHES: Aye. 



26 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Five to zero. 

CHAIRMAN BURTON: Thanks. Congratulations. 

DR. LLOYD: Thank you very much. 

SENATOR LEWIS: Mr. Bob Hight, position of 
Director of the Department of Fish and Game. 

CHAIRMAN BURTON: Mr. Chairman, Members, it 
really is a — 

SENATOR LEWIS: Would you please introduce 
yourself for the record. 

[ Laughter . ] 

CHAIRMAN BURTON: John Burton, representing the 
Third Senatorial District. 

It really is a pleasure for me to introduce Bob 
Hight. I met Bob Hight many years ago when he was the chief 
counsel of the State Lands Commission, when our former 
colleague, the late Ken Corey, was State controller. 

I had the opportunity to work with Bob both in a 
governmental capacity, but also when I was in a private practice 
of law in a professional capacity. 

I've always found him to be the type of person 
that understood the nature of what a, shall we say in the best 
term of the word, a bureaucrat was, that they had a 



27 

responsibility to the public who paid their taxes, that if there 
was a problem, you gave him the information; he would come back 
to you with an answer. It may not always be the answer you were 
looking for, but it would be an answer that would lay out the 
facts, lay out why A, B or C had to happen, and that was it. 

For those of us who have had to deal with 
governmental agencies, there's nothing more frustrating than 
asking the question and getting the run-around. 

I'll just briefly list, he is supported in this 
position for Fish and Game, which, why he took the job, shows a 
tremendous loyalty, I think, to the Governor, who also worked 
with him when the Governor was Controller, but he has all of the 
environmental groups. 

I'd like to go down the list of industry groups: 
California Building Industry Association, Cattlemen's 
Association, Dennis Carpenter who represents industry people, 
Jack Gualco who represents industry people, the Kern County 
Water Agency, Northern California Water Association. And to try 
to get Tim Leslie's support, The Regional Council of Rural 
Counties, as well as the Western States Petroleum Association, 
and the Pacific Merchants Shipping Association. 

I think that's an indication, again, of the fact 
that people respect Bob's knowledge, but also his availability 
and his willingness, when problems are brought to him, he 
understands. I think the reason that he does understand is that 
he did work under elected officials — Ken Corey, Gray Davis — 
who understood that part of public service is serving the 
public, and whether it's a public official or a member of the 



28 

public, contacts an agency for information. You get them that 
information, and again, it may not be what you wanted, but it 
will be what is. 

So it's with great pride that I recommend to you 
for the Director of Fish and Game Robert C. Hight. 

SENATOR LEWIS: Thank you very much. 

Mr. Hight. 

MR. HIGHT: Thank you, Mr. Chairman and Members. 

It's a pleasure to be here before you today to 
answer questions regarding my qualifications for the Director of 
the Department of Fish and Game. I'm extremely pleased and 
honored to be appointed by the Governor. 

I give you a commitment as I sit here that I will 
be responsive, as Senator Burton indicated, to all of your 
questions and needs. And it's an honor to be appointed, and I 
will work diligently to preserve the natural resources that the 
people of California would bestow upon me. 

I had the opportunity to meet with all of the 
Members in the last week and spend extensive time discussing 
issues. I'd be happy to answer any questions. 

CHAIRMAN BURTON: Senator Lewis. 

SENATOR LEWIS: Thank you. 

I was curious whether the administration, with 
regard to the Endangered Species Act, are you going to favor the 
more traditional species-by-species approach, or kind of the 
ecosystem, more general ecosystem approach as envisioned by the 
NCCP program? 

MR. HIGHT: I'm in favor of the NCCP concept 



29 

ecosystem restoration. 

I believe that in order to adequately address all 
of the species that we're dealing with in the state, we have to 
look beyond just a species-by-species approach. I think the 
things that are happening in the southern part of the state — 
Riverside, Orange County — in the NCCP approach, and the same 
thing that is happening in the Bay-Delta with the CAL-FED, is an 
adequate — is a wonderful example of how we should deal with 
the future . 

It also helps us to deal with future threatened 
and endangered species, and hopefully, we don't get to that 
point if we have adequate areas to preserve them. 

CHAIRMAN BURTON: I'd like to ask, and one of 
them's kind of irrelevant, but has the Commission taken a 
position on the fish wildlife versus fish and game bill yet? 

MR. HIGHT: No. 

CHAIRMAN BURTON: The Governor will probably be 
against it; it costs money to change. 

Can you comment on the Lake Davis and the 
northern pike? 

MR. HIGHT: Yes. 

CHAIRMAN BURTON: Do you have any idea of what 
happened? 

MR. HIGHT: No is the easy answer. 

Two theories. One, that there's a few pike who 
survived the poisoning. Everybody tells me that's probably 
remotely possible but unlikely. 

The other option is, somebody else planted them 



30 

there. 

We have been electro-shocking the lake for the 
last two weeks and we found one pike. So, at least it indicates 
there's not a lot of pike there, and we haven't found anything 
in the last two weeks. 

Also, during Labor Day [sic], no fishermen found 
any pike. 

When we heard the unfortunate news, the first 
thing I did was call the supervisors and the city council and 
said, "We have a problem, and I'm here to work with you to 
figure out how to resolve this issue." There's a town hall 
meeting there tonight. 

I wish I had a better answer, but you know, we're 
going to work the thing through with the community to try to 
resolve it. 

CHAIRMAN BURTON: I think the reason I even pay 
attention to Lake Davis is that I served with Pauline; although 
the lake was named after her late husband, Lester. 

They were showing a meeting, and the local people 
seemed to be a lot happier with the response of the Department 
to this problem than they were with the earlier problem, because 
at least they were all brought in. 

I guess nobody would know why somebody did that. 

What • s the difference between northern pike and 
the wall-eyed pike; do you know? 

MR. HIGHT: I'm sorry, I don't know. 

CHAIRMAN BURTON: Just want people to know I'm 
from the Midwest, and we had wall-eyed pike. I guess they were 



31 

pike with big eyes out the side. 

Senator Hughes. 

SENATOR HUGHES: When we had this discussion 
about the recent pike being found, I asked you, what do you 
think happened? You said maybe someone sabotaged the lake and 
dropped one in, because some fishermen like to have excitement. 

How do you regulate that to see that that kind of 
sabotage doesn't go on, that kids would do it, or a real 
fisherman would do it because they know what really excites the 
other fish. So, how do you police something like that? 

That's a wild thing to police. 

MR. HIGHT: Well, it's a very difficult task. 
Last year, the Legislature passed legislation to have a severe 
fine for people who do it. 

In addition, we have gone door-to-door in the 
city of Portola to see if anybody saw anything suspicious. I've 
tried to educate the people about the harm. 

Hopefully, the education process, getting the 
people involved to watch the lake, that's kind of the best 
policing process that we can do. 

SENATOR HUGHES: Are you planning any PSAs, 
anything like that out to the public so that they would be 
cautious and would report anyone they see throwing anything into 
the waters? 

MR. HIGHT: That's an option that we'll certainly 
look at. 

You know, we did the door-to-door, and that 
seemed to work very good. So, we need to follow-up on that. 



32 

SENATOR HUGHES: Alright, thank you. 

CHAIRMAN BURTON: Senator Baca. 

SENATOR BACA: Just a quick question. You 
touched baste. 

One of the areas in Southern California that has 
impacted us is the Endangered Species, especially as it pertains 
to the saddle-loving Delhi Fly in the immediate area that has 
stopped a lot of growth in the immediate area. 

What plans do you have to deal with the problem 
as it pertains to both federal and state with the fly that's 
listed or should be delisted? 

MR. HIGHT: The fly is a federally listed 
species, and the state does not list flies and butterflies. 

But I think the way to deal with the problem is 
through the NCCP ecosystem approach, where you provide adequate 
habitation for them. 

The entire endangered species process listing is 
subject to existing regulation and existing law. And I would 
hope that through communication, discussions, that solutions 
could be found. 

SENATOR BACA: Good. I hope we come up with 
definition of adequate, because adequate could mean a large 
area, which I've seen next to medical hospital that's weeds and 
everything are growing. Nothing is done there. It looks so bad 
in the immediate area. 

So hopefully, they can define what is adequate in 
terms of preserving, if we're going to preserve an area to deal 
with the fly, or kangaroo rat, or anything else in our immediate 



33 



area. 

MR. HIGHT: The NCCP process, which is a little 
rigorous, but I think validly so, has solutions at the end that, 
hopefully, define adequate or more than adequate, best 
preservation . 

SENATOR BACA: Thank you. 

CHAIRMAN BURTON: Any other questions? 

Moved by Senator Baca. Call the roll. 

Do you want to introduce your family? 

MR. HIGHT: Yes, my wife Mary is here, without 
whose support I wouldn't venture down this questionable road. 

CHAIRMAN BURTON: Witnesses in support, come 
forward and identify yourselves and your agency. 

Without objection, Mr. Hight's staff can take 
pictures . 

MR. PRICE: Mr. Chair, Pete Price. 

I'm here representing today the Natural Resources 
Defense Council, League for Coastal Protection, Center for 
Marine Conservation, as well as United Anglers of Southern 
California, all of whom strongly support Mr. Hight. 

MR. GUALCO: Mr. Chair and Members, Jack Gualco 
on behalf of industry clients as well as agriculture and water. 

I'd like to say the Save the New Delhi Sandfly 
Committee, Senator Baca, but unfortunately not, in support. 

But I want to talk about one recent 
accomplishment by the Director. He was able to pull disparate 
interests together on the Kings River to come up with an 
adaptive management plan that has brought together the interests 



34 

of irrigated agriculture, sport fishermen, and people concerned 
about the flows of the River. And the Director deserves to be 
congratulated for that. It's quite a victory and one supported 
by the entire Valley Delegation. 

We urge your support of his confirmation. 

MR. GARDNER: I'm Dave Gardner, President of the 
California Fish and Game Wardens Protective Association. 

On behalf of the wardens, men and women of 
California, we are pleased and privileged to recommend for 
confirmation Robert Hight as Director of the Department of Fish 
and Game, and for him to lead us into the 20th Century. 

MS. SADLER: I'm Lynn Sadler with the Mountain 
Lion Foundation, and with the other 98-and-a-half percent of the 
state population that does not represent hunting and fishing, 
and whom Mr. Hight has recognized still, nonetheless, has a very 
important stake in the protection of our natural resources. 

And don't worry. We don't agree on everything. 
We're just most pleased that he has recognized that we're all 
going to have work together to protect our natural resources. 

We support his confirmation. 

MR. MERAL: Jerry Meral with the Planning and 
Conservation League. 

We strongly support Mr. Hight' s nomination. 

MR. McCALL: John McCall, National Audubon 
Society in strong support. 

MR. CURTIN: Danny Curtin, California State 
Council of Carpenters in support of the nomination. 

Thank you. 



35 

MR. MACOLA: Mr. Chairman, Members, Stephen 
Macola on behalf of Moulton Niguel Water District in 
support . 

MR. CAVES: Joe Caves, on behalf of the Nature 
Conservancy strongly in support. 

CHAIRMAN BURTON: Witnesses in opposition? 

Call the roll. 

SECRETARY WEBB: Senator Baca. 

SENATOR BACA: Aye. 

SECRETARY WEBB: Baca Aye. Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 
Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

Hold the roll open. 

Congratulations, Bob. 

MR. HIGHT: Thank you very much. 

SENATOR LEWIS: Next is Marcy Saunders, Chief of 
the Division of Labor Standards Enforcement. 

Good morning, Senator Speier. 

SENATOR SPEIER: Good morning, Senator Lewis. 

Mr. Chairman and Members, it's my great privilege 
to introduce to you today the nominee for the State Labor 
Commissioner, Marcy Saunders. 

In many respects, this appointment is historic. 
Ms. Saunders has succeeded where others have failed. She is the 



36 

first woman to be elected in the nation as the business manager 
of the Building and Constructions Trade Council. 

To show how persuasive and effective she is, one 
of the unions within the Building and Construction Trades was 
not supportive. In fact, it was the Plumbers Union. But she 
didn't stop there, and before all was said and done, the head of 
the Plumbers Union proposed marriage to her. I think that's 
pretty effective. 

[ Laughter . ] 

SENATOR SPEIER: She also negotiated the first 
ever Project Stabilization Agreement in California for the $2.6 
billion expansion at San Francisco International Airport. 

She reflects a great American success story, from 
flight attendant to her position as the Business Manager of the 
Building and Construction Trades. 

She's good for labor and she's good for business. 
I can speak to that because for the two years that I was not a 
Member of this Legislature, I worked in the private sector for a 
software game company that was in the process of expanding and 
building new office space in San Mateo County, in fact, an 
entire campus. And there were, as you would imagine, scuffles 
and problems that arose over labor issues. 

And in my role, which was then different, I found 
working with Ms. Saunders was an extraordinarily positive 
experience, as did the other members of the company. 

She's taken charge of this Division, demanding 
accountability and enforcement, and zero tolerance for even the 
appearance of impropriety. I think she's going to do a 



37 

remarkable job and continue her legacy of firsts. 

So, I would highly recommend her as the new Labor 



Commissioner . 



SENATOR LEWIS: Thank you very much. 

Assemblyman Papan, are you here on this matter as 



well? 



ASSEMBLYMAN PAPAN: I am. 

Senator Lewis, I think the Senator has covered 
much of what I would have said about the lady. 

CHAIRMAN BURTON: Why don't you have a seat. 
You're here as a representative of the business caucus of the — 

ASSEMBLYMAN PAPAN: A little of that. 

As a moderate Democrat who tries to bring all 
sides together, I think she would be a good candidate for the 
position she's seeking, and I have no reservations, Senator 
Lewis . 

SENATOR LEWIS: Speaking of endangered species, 
moderate Democrat. 

[Laughter. ] 

ASSEMBLYMAN PAPAN: So, I would recommend her 
highly, and I would respectfully ask that she be favorably 
considered for the position. 

Thank you, Mr. Chairman. 

SENATOR LEWIS: Thank you. 

Ms. Saunders, please. 

MS. SAUNDERS: First of all, Senator Lewis and 
Senator Knight, I would like to thank you for reconsidering my 
coming back on to the agenda once you realized that there might 



38 

be a personal dilemma for me if I had not been able to be here 
today. I want to thank you for that. 

SENATOR LEWIS: You're welcome. You can thank 
Senator Burton for breaking our arms. 

MS. SAUNDERS: I want to also thank both Senator 
Speier and Assemblyman Papan for their introductions. 

I want to thank you for the opportunity to come 
before you today and to be able to tell you just a little bit 
about and what I hope to see happen with DLSE in the near 
future. 

In my 13 years With the Building and Trades 
Council down in San Mateo County, I feel that I was pretty 
successful in forging alliances and building consensus between 
labor, business, and elected officials for the economic 
betterment of our community. It was one of those things that 
Governor Gray Davis recognized in me, that I was a consensus 
builder, and would hope that I would take this throughout the 
state, and that is my plan. 

I gained a good reputation among both labor and 
business and gained great credibility. Because of that, I was 
asked to sit on many business-oriented committees. Of course, I 
was asked to do that for two reasons. I was a believer in 
economic viability, but they also wanted my opinions on how we 
could work together as business and workers in the community so 
that everybody could win. 

I will admit that I am known as being tough, but 
I'm also known as being very fair. I think that those are two 
qualities that the Labor Commissioner must have when she's 



39 

enforcing the labor laws. 

I have a great deal of background in wage and 
hour laws, and I think that I can hit the ground running, and I 
think I already have. 

As far as the near future for DLSE, again, I'm 
going to bring up the fact that I like to build consensus and 
build partnerships, and I don't think that that's always 
happened in DLSE between the workers and business. 

With that in mind, I'm going to be putting 
together advisory committees for the different industries that 
we cover within the Department. On those committees will be 
business people, contractors if needed, and labor 
representatives, and also advocates for workers. We will sit 
down together. We will look at the laws. We will learn how to 
interpret the laws together, and we'll work to move forward to 
enforce the laws. 

I have found just in the few months that I've 
been on this job that business people that I have met with are 
just as concerned about the enforcement of labor laws as are 
workers. I think that the problem being that you have most 
businesses out there that do abide by the laws, and most workers 
that also do what they're supposed to do. 

However, we do have those egregious businesses 
out there, and those are the ones that are undercutting our good 
businesses and are hurting our workers to get a competitive 
edge. And I want to stop that. I want to be able to protect 
both business and the workers for the economic viability of the 
state . 



40 

I also would like to do more educational 
outreach. The laws within my Division are changing 
continually. I don't think people, most people, necessarily 
want to break the law; I'm not sure that they always understand 
the law. So, I feel that if we go out and do more educational 
outreach, both the workers and businesses, that will save us a 
lot of problems. 

I'm also looking to hire more bilingual people 
because so many of the people that we represent, such as the 
agricultural industry and the manufacturing industry, I think 
it ' s much more difficult for them to be able to communicate with 
us unless we have more bilingual people. 

I'm also looking at public information. Our 
public information is not very good. I've taken one of my 
assistant chiefs, and she is working exclusively on upgrading 
public information so we are more accessible to the public. 

I'm also looking to do some streamlining within 
the Division so that we can get more bang for the buck. 

In the long run, I guess really what I want to 
say is that it is my job to make sure that the labor laws in 
this state are enforced. And I will make sure that that is 
done. I'm hoping to do that to a certain extent in a 
partnership, and if partnerships don't always work, I will tell 
you that I will aggressively go after the people that do not 
want to abide by the law. 

My reasoning for that is pretty simple. If 
businesses aren't successful, then businesses can't hire 
workers. If workers aren't working, then workers can't spend 



41 

money. And if money isn't spent, then we have no economic 
viability in this state. 

Thank you. 

CHAIRMAN BURTON: Thank you, Mr. Chairman. 

Just two questions. How did you go from MIUFA to 
the Building Trades? 

MS. SAUNDERS: I was involved in a strike with 
TWA and Carl Eichon back in 1986. 

CHAIRMAN BURTON: I remember it well. 

MS. SAUNDERS: And my predecessor, who is in the 
room here today, Bob Gilmore, sort of noticed me, and asked me 
to come forward, and asked me if I would be interested in this 
job. 

And my father, who was a contractor, I did 
understand construction. But I also understood more of what he 
really wanted me to do, and that was to get involved with the 
community and to let everybody know that organized labor isn't 
that bad. 

So, that was how I got hired. 

CHAIRMAN BURTON: The other question is, what is 
Linda Fluit doing these days, if anything? 

MS. SAUNDERS: I really don't know. The last I 
heard from her was about two years ago, but I know she's not 
flying anymore. 

CHAIRMAN BURTON: Still living down there in the 
County? 

MS . SAUNDERS : Yes . 

CHAIRMAN BURTON: That answers all my questions. 



42 

[Laughter. ] 

CHAIRMAN BURTON: I used to take that 5:45 a lot 
out of Dulles, so Linda and I flew many miles together. 

SENATOR LEWIS: Ms. Saunders, I was wondering, 
given your strong union background, how can convince me that you 
can be somewhat objective in matters relating to labor law and 
unions? 

MS. SAUNDERS: Well, again, Senator Lewis, you 
don't really know me. It's going to take a while for me to 
build up a reputation with you. 

But I think if you look to some of the letters of 
support that came in on my behalf, you will see that there was 
really quite a large cross section of letters that came not only 
from organized labor. They also came from the business 
community. They also came from places like the Farm Bureau. 
They came from people that represent businesses. 

So, I think that alone says that people feel that 
I can be pretty objective. 

SENATOR LEWIS: Can you give me any example of 
any public policy that you have a difference with organized 
labor? 

MS. SAUNDERS: No, I really can't. 

SENATOR LEWIS: I wanted to ask you a couple of 
questions, maybe more than a couple, about the Project Labor 
Agreement that you negotiated with the San Francisco Airport. 

First of all, how many non-union employees right 
now are being compelled to pay union fees or dues? 

MS. SAUNDERS: That's a question that's very, 



43 

very difficult to answer because I have not seen any reports or 
surveys on the Airport since last January. And none of the 
surveys actually showed who was paying into — who was paying 
union dues or weren't paying union dues. 

The other thing that makes that a somewhat 
difficult question to answer is that within the Project Labor 
Agreement, we did change our union security clause. Whereby, 
instead of an employee having to pay union dues on the eighth 
day, we extended that to 30 days because we recognized that 
there would be quite a few contractors out there that would be 
doing jobs that would be less than 30 days. 

So, it would be very, very difficult for me to be 
able to say, especially because we never know on any given day 
how many employees are actually working out there. 

SENATOR LEWIS: Would I be right in suspecting 
that you'd have a similar answer to the question of the ratio of 
union to non-union employees working on this project, versus the 
local average on the projects? 

MS. SAUNDERS: I can probably answer that 
question for you best by saying that within San Mateo County, we 
do approximately 80 percent of the construction work union. So, 
I think I could safely say that, with that in mind, it probably 
is working pretty much the same out at the Airport. Probably 80 
percent union to maybe 20 percent non-union. 

SENATOR LEWIS: I understand that there is a 
court case that's been filed before the Supreme Court? 

MS. SAUNDERS: Correct. It was heard on June 
7th. 



44 

SENATOR LEWIS: Oral arguments, I guess, that 
some of the litigants include the Bay Area Black Contractors 
Association, the Hispanic Contractors Association, the American 
Asian Contractors, and Northern California Minority Trade 
Council . 

I've been told that since the PLA went into 
effect, that minority prime contractors awards have dropped by 
91 percent, and that women enterprises have dropped by 74 
percent. 

Do these coincide with your understanding? 

MS. SAUNDERS: No. I'm not really sure where you 
got those figures. 

I can tell you that on any given day out at the 
Airport, minority contractors are about 25 to 30 percent of the 
work out there. So, that drop of 71 percent doesn't make a lot 
of sense because it is between 25 and 30 percent of minority 
contractors out at the Airport. That's pretty much the norm 
everywhere. 

The one thing that I'm especially proud of 
because of this Project Labor Agreement is that on all the 
surveys that are done on a quarterly basis by the Airport, and 
that includes the one for the contractors, the workers out at 
the Airport are anywhere from 48 to 51 percent minority or 
women . 

SENATOR LEWIS: If things are that rosy, why are 
all these groups litigants in the action? 

MS. SAUNDERS: You know, I don't know. They 
haven't talked to me about it. 



45 

SENATOR LEWIS: One of the supposed advantages of 
the PLA Agreement was that there's an absolute guarantee against 
strikes. But I understand it wasn't too long ago the carpenters 
went out on strike, and although it was a very short-lived one, 
that it ended up costing about $3 million. 

Who should have to pay the $3 million to 
reimburse for the increased cost of the project? 

MS. SAUNDERS: Well, first of all, let me explain 
to you that that was not a strike. That was some disgruntled 
workers that went ahead and put up some pickets, which some of 
the workers did not understand was not a sanctioned strike. 

Second of all, I'm not sure where the $3 million 
amount came from, because it was my understanding in my 
conversations with the former head of the Airport, Lou Turpin, 
and now with John Martin, that if the Airport were to be closed 
down, it costs the Airport approximately $1 million. 

Thank God we had that Project Labor Agreement 
because we had mechanisms within that Project Labor Agreement to 
head into arbitration immediately, get it cleared up, and have 
just about everybody back to work to the second day. 

As far as who pays for that, that is something 
that has to be decided through the Project Labor Agreement. 

But understand that it was not the union that 
caused those pickets to go up. It was individual people. 

SENATOR LEWIS: So, signs went up and people 
withheld services, but it wasn't a strike. 

MS. SAUNDERS: I said it was not a not sanctioned 
strike, and it was not a strike because it was not a union that 



46 

went on strike. It was a group of people that put up pickets. 
There's a difference. 

SENATOR LEWIS: Thank you. 

Senator Baca. 

SENATOR BACA: Marcy, first of all, I thank you 
for responding in reference to hiring additional bilingual 
individuals to deal with part of the problem. So, I commend you 
for taking that action. 

Just one simple question. What do you think are 
the most important challenges facing DLSE at this time? 

MS. SAUNDERS: I think our biggest challenge is 
that over the years, you know, we've lost a lot of our employees 
and our funding, which has not made it quite as effective. 

The workers that we have in DLSE right now I 
think are very dedicated, very hard-working people. However, 
they don't have a lot to work with. 

My goal is to be able to get this Division up and 
running to where it was 10 and 12 years ago, where we actually 
were going after the really egregious business people and 
contractors, and making sure that we protect all of our workers 
because where our funding has gone down approximately 25 percent 
in the last 10 years, we have an additional 3 million workers in 
the state that we have to protect. And of course, my thinking 
the way I do, in saying that we have to protect workers, but 
that we also have to protect businesses, then the only way we're 
going to be able to do that is by being able to prove to the 
Legislature that we're working and working hard so that they 
would be willing to maybe be able to give us a little bit more 






47 

money so we could hire a few more people. 

SENATOR LEWIS: One additional question. Back in 
October of '98, the MWD announced that it was increasing their 
estimated cost for the East Side Reservoir Project by about $220 
million. And they're the biggest PLA, I guess, in Southern 
California. 

Do you have a rough idea when we enter into these 
PLA contracts, how much does that tend to drive up the cost of a 
project? 

MS. SAUNDERS: Actually, it's my opinion that 
Project Labor Agreements don't cause projects to be more 
expensive. I think they're cost saving to a certain extent. 

I'm not in a position to be able to discuss that 
project with you because that's not my project. 

However, of the Project Labor Agreements that 
I've done, both private and public, I don't really think that I 
would be able to get businesses or developers to agree to these 
Project Labor Agreements unless I had a track record for them 
being cost effective. 

I really don't have any idea. That it could have 
been — some of it could have been the decision of the owners 
themselves to do changes, their own change orders in contracts. 
You see that happening out at the Airport. It's already 200 
million more than what it was supposed to be, but that's because 
of architectural changes, things like that. 

SENATOR LEWIS: Senator Hughes. 

SENATOR HUGHES: I'd just like to move the 
nomination. 



48 

SENATOR LEWIS: Thank you. 

MS. SAUNDERS: Could I introduce my family? 

SENATOR LEWIS: I was just going to ask you to do 
that. 

MS. SAUNDERS: And I would like to have my family 
stand up, especially my father, Al Vacura, who flew all the way 
from Fairbanks, Alaska to be at this confirmation here this 
morning. 

My younger brother, Peter, who came all the way 
over from across the street where he ■ s an engineer for 
Caltrans. 

And my wonderful husband of ten months, Gary 
Saunders, who's the Business Manager for the Plumbers and Steam 
Fitters Local 467, San Mateo County. 

And I'd also like to introduce all my friends who 
came to support me today. 

SENATOR LEWIS: We might give them an 
opportunity, or at least some of them, to introduce themselves. 
We have a pretty crowded room here, which tells me you probably 
have a fair number of people who'd like to testify on your 
behalf? 

MS. SAUNDERS: There's about five or six is all. 

SENATOR LEWIS: Then why don't we ask people to 
come up. She said five or six. Is this the new math? 

Senator Hughes has already moved the nomination. 
She has to leave, so I will ask as a courtesy that we open the 
roll and just call her name. 

SECRETARY WEBB: Senator Hughes. 



49 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. 

SENATOR LEWIS: Go ahead. 

MR. KELLOGG: My name is Jim Kellogg. I 
represent the United Association of Journeymen and Apprentices 
of the plumbing and pipe fitting industry for the United States 
and Canada. 

On behalf of our 300,000 members, we rise in 
support of Marcy. She has a track record of leadership 
positions where she has demonstrated her knowledge in labor law 
and labor issues. She understands and knows what Labor 
Commissioner's job is all about, and Marcy will bring integrity 
and credibility to this job, and this position will be an asset 
with her in it to this administration, this Legislature, and to 
you and me. 

I urge you to give unanimous support for Marcy 
before the entire Senate. 

And I would add one thing outside the labor 
issue, she doesn't like Diamond Lanes either. 

MR. BALGENORTH: I'm Bob Balgenorth, President of 
the State Building and Construction Trades Council. 

I'm really proud to say that all 200 unions that 
are affiliated with the Council have unanimously endorsed 
Marcy. There's a couple reasons for that. Marcy has done an 
outstanding job as the first woman to be Business Manager of a 
building trades council. She has built the respect of the 
community, of the public, and of all the unions that have worked 
under her. 



50 

I really think that you should recommend her 
unanimously. Thank you very much. 

MR. RANKIN: Tom Rankin with the California Labor 
Federation. We strongly support the confirmation of Marcy. 
She's tremendously big job ahead of her. She has to rebuild a 
Division that's been cut by, as she said, at least 25 percent 
while the workforce has grown tremendously. And she's got a $60 
billion underground economy to deal with, and she is the right 
person for the job. 

She's got the experience. She's got the 
intellect. And she has the strength of character that it's 
going to take to be the chief law enforcement officer for labor 
law in California. 

SENATOR LEWIS: Maybe we can start asking people 
to just name an organization. 

MR. WINSTEAD: Joe Winstead, California State 
Pipe Trades Council. 

We would like to rise in support of Marcy. 
She'll bring a lot of credibility and do a fine job for the 
state of California. 

Thank you. 

SENATOR LEWIS: A little too long. 

Next. 

MR. PERNELL: Robert Pernell, representing the 
California State Council of Laborers. 

We are in strong support. 

SENATOR LEWIS: Getting better. 

Next. 



51 

MR. CURTIN: Danny Curt in, California State 
Council of Carpenters in support. We represent those renegade 
carpenters who were unauthorized in that wildcat strike. 

Thank you. 

MR. GORDON: Rich Gordon. I am a member of the 
San Mateo County Board of Supervisors, and am here representing 
the entire Board who supports this appointment. 

Also, I'm the immediate past Chair of the Board 
of Directors of the Redwood City-San Mateo County Chamber of 
Commerce and can attest that this woman knows how to build 
cooperative relationships with business that make it a win-win 
situation for all of us. 

MR. BROAD: Teamsters, Amalgamated Transit Union, 
Engineers and Scientists, Machinists, Hotel and Restaurant 
Employees, and Food and Commercial Workers in support 
Barry Broad. 

MS. TISSIE: I'm Adrienne Tissie. I'm the Mayor 
of the City of Daly City. I'm also a principal in a business 
called Bay Relations, which is a land-use consulting firm and 
public relations firm in San Mateo County. 

Marcy has the intelligence, the integrity, and 
the endurance to perform this job. I want you to know that I 
have personally worked with her in the private sector with 
developers, and she's a fantastic negotiator. She'll be a true 
asset to this administration. 

MR. LANHAM: Thank you. David Lanham, Operating 
Engineers, Local 12. 

MR. WAGNER: William C. Wagner, Business Manager. 



52 

SENATOR LEWIS: Perfect. 

Next. 

MR. STRAWBRIDGE: Scott Strawbridge, Executive 
Vice President, Mechanical Contractors Association, Northern 
California, Central California, and Southern California, a 
management group. 

We are here to support Marcy's nomination. 

MR. MONAGAN: Michael Monagan on behalf of the 
Sheet Metal and Air Conditioning Contractors and the Western 
Wall and Ceiling Contractors, privileged to support Marcy. 

MR. CARTER: Art Carter, representing the State 
Association of Electrical Workers and the Western States Council 
of Sheet Metal Workers Unions in support. 

SENATOR LEWIS: Thank you. 

Next. 

MR. BERNACCHI: Eddie Bernacchi, on behalf of the 
National Electrical Contractors Association. We're also in 
support of Marcy. 

MR. NACK: I'm William Nack. I'm the Business 
Manager for the San Mateo County Building Trades Council. I'm 
the person that left — that took over from Marcy when she left. 
I can attest that she has a great reputation in the County for 
working with both labor and business. 

And we, on behalf of all of the affiliated 
unions, strongly support her appointment. 

SENATOR LEWIS: Thank you. 

Now let's hear from anyone in the audience that 
might either be opposed or have reservations they want to 



53 



express. Apparently none. 

We have a motion. Please call the roll. 

SECRETARY WEBB: Senator Baca. 

SENATOR BACA: Aye. 

SECRETARY WEBB: Baca Aye. Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight, 
Senator Lewis. 

SECRETARY WEBB: Senator Burton. 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Three to zero. 

CHAIRMAN BURTON: Congratulations, Marcy. 

[Thereupon this portion of the 

Senate Rules Committee hearing was 

terminated at approximately 10:55 A.M.] 
— 00O00 — 



54 

CERTIFICATE OF SHORTHAND REPORTER 

I, EVELYN J. MIZAK, a Shorthand Reporter of the State 
of California, do hereby certify: 

That I am a disinterested person herein; that the 
foregoing transcript of the Senate Rules Committee hearing was 
reported verbatim in shorthand by me, Evelyn J. Mizak, and 
thereafter transcribed into typewriting. 

I further certify that I am not of counsel or 
attorney for any of the parties to said hearing, nor in any way 
interested in the outcome of said hearing. 

IN WITNESS WHEREOF, I have hereunto set my hand this 

, 1999. 





MLZAK \ 
Reporter 



Shorthand Report 



376-R 

Additional copies of this publication may be purchased for $3.75 per copy 
(includes shipping and handling) plus current California sales tax. 

Senate Publications 

1 020 N Street, Room B-53 

Sacramento, CA 95814 

(916)327-2155 

Make checks payable to SENATE RULES COMMITTEE. 
Please include Stock Number 376-R when ordering. 



DOCUMENTS DEPT. 
^HEARING OCT -4 1999 

SENATE RULES COMMITTEE p^p ™ NCISCO 

^ PUBLIC LIBRARY 

STATE OF CALIFORNIA 




STATE CAPITOL 

ROOM 113 

SACRAMENTO, CALIFORNIA 

WEDNESDAY, JUNE 23, 1999 
10:37 A.M. 



377-R 



SENATE RULES COMMITTEE 
STATE OF CALIFORNIA 



HEARING 



STATE CAPITOL 

ROOM 113 

SACRAMENTO, CALIFORNIA 



WEDNESDAY, JUNE 23, 1999 
10:37 A.M. 



Reported by- 



Evelyn J. Mizak 
Shorthand Reporter 



11 



APPEARANCES 

MEMBERS PRESENT 

SENATOR JOHN BURTON, Chair 

SENATOR JOHN LEWIS, Vice Chair 

SENATOR JOE BACA 

SENATOR TERESA HUGHES 

SENATOR WILLIAM KNIGHT 

STAFF PRESENT 

GREG SCHMIDT, Executive Officer 

PAT WEBB, Committee Secretary 

NETTIE SABELHAUS, Consultant on Governor's Appointments 

WADE TEASDALE, Consultant to SENATOR LEWIS 

FELICE TANENBAUM, Consultant to SENATOR HUGHES 

CHRIS BURNS, Consultant to SENATOR KNIGHT 

MANNY HERNANDEZ, Consultant to SENATOR BACA 

ALSO PRESENT 

CHARLES H. CENTER, Member 
Industrial Welfare Commission 

SENATOR HILDA SOLIS 

BILL CAMP 

California Labor Federation, AFL-CIO 

JOSE PEREZ 

California Hispanic Chambers of Commerce 

GRISELDA BARAJAS 

Sacramento California Hispanic Chamber of Commerce 

RAFAEL SANCHEZ, Finance Chairman 

United States Hispanic Chamber of Commerce 



Ill 



TIM CREMINS 
Operating Engineers 

JOE WINSTEAD 

California Pipe Trades Council 

MICHAEL MONAGAN 

California Sheet Metal and Air Conditioning Contractors 

BRITTON McFETRIDGE 

State Building and Construction Trades Council 

EDDIE BERNACCHI 

National Electrical Contractors Association 

PETE CONATY 

State Association of Electrical Workers and Sheet Metal Workers 

BOB HOUSTON 

Concrete Contractors Association 

RUSTY AREIAS, Director 

Department of Parks and Recreation 

SENATOR JIM COSTA 

EDWIN F. LOWRY, Director 

Department of Toxic Substances Control 

SENATOR MARTHA ESCUTIA 

BILL CAMP 

California Labor Federation, AFL-CIO 

JOHN GEOGHEGAN 
Private Citizen 

PETER WEINER 

Environmental Technology Council 

CRAIG COPELAN, President Elect 

Professional Engineers in California Government 

SANDRA SPELLISCY 

Planning and Conservation League 



IV 



JODY SPARKS 

Sierra Club of California 

DAN AGUIRRE, President 

California Association of Professional Scientists 

JANE WILLIAMS, Executive Director 
California Communities Against Toxics 
Coalition for Environmental Justice 

GORDON HART 
Private Citizen 



V 

INDEX 

Page 
Proceedings 1 

Governor ' s Appointees : 

CHUCK CENTER, Member 

Industrial Welfare Commission 1 

Background and Experience 1 

Questions by SENATOR LEWIS re: 

Position on AB 60, Overtime Pay 1 

Possibility of Manufacturers Moving 

Out of State 2 

Adequacy of Current Minimum Wage 2 

Local governments Imposing Local 

Living Wage 3 

Inconsistency in Position on Living Wage 
Ordinances and Current Minimum Wage 3 

Possibility of Conflict of Interest 4 

Questions by SENATOR BACA re: 

Possibility of Employers Leaving 

California with Passage of AB 60 4 

Effects of AB 60 on Employees 5 

Questions by SENATOR KNIGHT re: 

Problem of Businesses Leaving California 

As Result of Increase in Minimum Wage 6 

Questions by SENATOR LEWIS re: 

Exodus of Business from California at 

Any Time during Past 2 Years 7 

Motion to Confirm 7 



VI 



Statements in Support by 

SENATOR HILDA SOLIS 7 

Witnesses in Support: 

BILL CAMP 

California Labor Federation, AFL-CIO 8 

JOSE PEREZ 

California Hispanic Chambers of Commerce 8 

GRISELDA BARAJAS 

Sacramento Hispanic Chamber of Commerce 9 

RAFAEL SANCHEZ, Finance Chairman 

United States Hispanic Chamber of Commerce 9 

TIM CREMINS 

Operating Engineers 9 

JOE WINSTEAD, Director 

California Pipe Trades Council 9 

MICHAEL MONAGAN 

Sheet Metal and Air Conditioning Contractors 9 

JERRY MCFETRIDGE 

State Building and Construction Trades Council 9 

EDDIE BERNACCHI 

National Electrical Contractors Association 10 

PETE CONATY 

State Association of Electrical Workers and 

Sheet Metal Workers 10 

BOB HOUSTON 

Concrete Contractors 10 

Committee Action 10 

RUSTY AREIAS, Director 

Department of Parks and Recreation 10 

Introduction and Support by 

SENATOR JIM COSTA 10 

Plans for Department 11 



Vll 



Questions by CHAIRMAN BURTON re: 

Amount of Money in Current Budget 15 

Park Bonds for Ballot 15 

Request for Governor's Position on 

"Resource Bond" Combining Water and 

Parks 16 

Questions by SENATOR LEWIS re: 

Tendering of Resignation on Coastal 

Commission .17 

Position on SB 1277 (Hayden) , which 

Would Prohibit Building Public Roads through 

State Parks 17 

Determination of Appropriate Level of 

Fees Imposed on Park Users 18 

Appeals Process for Denial of Access 

To State Parks 19 

Commitment to Fulfilling Term 21 

Questions by SENATOR HUGHES re: 

Department's Failure in. Area of 

Equal Employment Opportunities 21 

Possibility of Hiring People with 

Experience in Conservation Corps 23 

Dedication to Historic and Cultural 

Conservation 23 

Questions by SENATOR BACA re: 

Plans to Visit Parks and Determine 

Amount of Maintenance Needed 25 

Motion to Confirm 25 



Vlll 



Questions by SENATOR KNIGHT re: 

Mount Whitney Fish Hatchery 25 

Committee Action 27 

EDWIN F. LOWRY, Director 

Department of Toxic Substances Control 27 

Introduction and Support by 

SENATOR MARTHA ESCUTIA 27 

Background and Experience 29 

Questions by CHAIRMAN BURTON re: 

Need to Give Input to Members and 

Governor on Pending Legislation 32 

Questions by SENATOR LEWIS re: 

Number of Sites Currently on 

Superfund List 32 

Number of Years and Dollars Needed 

To Clean Up All Sites Currently Listed 33 

Factors Used to Determine Ranking of 

Various Sites in Terms of" Priorities 33 

Identification of Funding Sources for 

Orphan Sites 34 

Stringf ellow Site 34 

Questions by SENATOR HUGHES re: 

Sufficiency of Soil Samples in 

Determining Site Safety 3 5 

Agency's Role in Potential School Site in 

Exposition Park which Was a Former 

Armory 3 6 

Commitment to Look at Site in 

Exposition Park 37 



IX 



Questions by SENATOR BACA re: 

Toxics in Fertilizers 38 

Questions by SENATOR KNIGHT re: 

Certification Plan for Aerosol Can 

Recycling Equipment 3 9 

Economic Feasibility Determination 41 

Motion to Confirm 43 

Witnesses in Support: 

BILL CAMP 

California Labor Federation, AFL-CIO 43 

JOHN GEOGHEGAN 44 

PETER WEINER 

Environmental Technology Council 44 

CRAIG COPELAN, President Elect 

Professional Engineers in California Government 44 

SANDRA SPELLISCY 

Planning and Conservation League 44 

JODY SPARKS 

Sierra Club of California 44 

DAN AGUIRRE, President 

California Association of Professional Scientists .... 44 

JANE WILLIAMS, Executive Director 

California Communities Against Toxics 

Coalition for Environmental Justice 45 

GORDON HART 45 

Committee Action 46 

Termination of Proceedings 46 

Certificate of Reporter 47 



P-R-O-C-E-E-D-I-N-G-S 
— 00O00 — 

CHAIRMAN BURTON: Industrial Welfare 
Commission, Chuck Center. 

Chuck, do you want to tell us a little bit 
about yourself and your qualifications on the Board? 

MR. CENTER: Okay. 

I thank you Mr. Chairman, Senators. I'm 
Chuck Center. I'm the Legislative Director of the State 
Council of Laborers. 

This is a reappointment. I was appointed by 
the Governor to the Industrial Welfare Commission, went 
through a number of hearings on the eight hour day. 
Formerly a construction worker for twelve years in marine 
construction, I worked in management in retail for about 
six months for the K-Mart industry and then became — 
filled representing for the Operating Engineers, then 
became Director of the Foundation for Fair Contracting, and 
eventually became a lobbyist for the State Council of 
Laborers in November of 1990. 

CHAIRMAN BURTON: Questions, Members of the 
Committee? Senator Lewis. 

SENATOR LEWIS: Mr. Center, first of all, 
what is your position on Assembly Bill 60, dealing with 
overtime pay? 

MR. CENTER: We have supported AB 60 with 
our organization. 

SENATOR LEWIS: In the case of California 



manufacturers, a lot of them have twelve-hour double shifts 
rights now. If this bill goes through, unless there's some 
kind of exemption, or something, to maintain maximum 
capacity, they'd have to go to eight-hour triple shifts, 
which could drive up costs significantly. 

Question, how much better off are employees 
in California if manufacturers locate out of the state and 
take the jobs with them? 

MR. CENTER: Well, I wouldn't think they 
would be better off if they lose their jobs, but prior to 
the elimination of the eight-hour day under the IWC last 
year, there was 12-hour shifts. The manufacturers just 
have to go to election within their employees. 

I think that will still be available if AB 60, in 
what process it comes out of — right now it's just in the 
Senate, and it's still a work in progress — I think there'll 
still be election opportunities for the employees to choose 
alternative work shifts. 

SENATOR LEWIS: I wanted to ask you about the 
minimum wage in California. Do you think it's adequate 
currently? 

MR. CENTER: It's been raised. There was a 
number of hearings. Right now, I think it will probably be 
readdressed again by the Industrial Welfare Commission. 

I think we need to look at both sides. It 
affects the employees as well as the employers. And 
really, I haven't made a decision whether it's adequate or 
not. We need to go through a hearing process, and through 



that avenue, then decide if it's adequate or not. 

I don't have a position on that right now. 

SENATOR LEWIS: What about the fact that 
there are some local governments now that are promoting 
this concept of a living wage, a local living wage. Do you 
think that a local government — city or county — has the 
legal authority to impose that kind of a legal wage? 

MR. CENTER: It's happened in localities, 
and I'm not sure if they've been challenged in court or 
not. I guess they do, because it's happened in a number of 
localities throughout the State of California. 

SENATOR LEWIS: What's your thought on that? 

MR. CENTER: We in our organization, we do 
support a livable wage. We think people should have a wage 
that's adequate for them to work and buy houses and cars in 
their area. We don't think that's a bad thing. 

SENATOR LEWIS: But you just said you were 
undecided on whether or not the minimum wage should be 
raised or not, but now you're saying that you think that 
the livable wage ordinances that are passed with hire wages 
is a good thing? 

MR. CENTER: Yes. 

SENATOR LEWIS: Isn't that a little 
inconsistent? 

MR. CENTER: If it's passed in a locale 
already, and I think there's input from both sides, it's 
taken by a vote of elected officials. I think that's a fair 
process. 



Our organization has supported that in 
localities. 

SENATOR LEWIS: Last question. 

You're currently the Director of the 
California State Council of Laborers? 

MR. CENTER: Yes. 

SENATOR LEWIS: One of your responsibilities 
is legislative affairs? 

MR. CENTER: That's correct. 

SENATOR LEWIS: Does that create any kind of 
a conflict of interest for you on some of your votes on the 
IWC? 

MR. CENTER: I don't think so. It didn't in 
the past when I was on the IWC under a different 
administration. 

I discussed that with the prior 
administration, this administration. .We still support 
legislation or oppose legislation that affects our 
membership. 

SENATOR LEWIS: So, you've never abstained 
or recused yourself on any vote? 

MR. CENTER: No, I haven't. 

CHAIRMAN BURTON: Senator Baca. 

SENATOR BACA: Just a quick question. 

One of the questions that was asked in 
reference to AB 60, in your opinion, do you think employers 
will actually leave if in fact the bill is passed? 

MR. CENTER: Senator Baca, I couldn't really 



answer that because I don't represent employers. 

I think we had some of those same 
arguments — 

SENATOR BACA: Business or manufacturers? 

MR. CENTER: I think we had the same 
argument, I think, from industry, too, when they increased 
the minimum wage, and we didn't see a big movement of 
industry out of the State of California when they raised 
the minimum wage in California. 

I could not speak for the employers on that. 

SENATOR KNIGHT: Let me ask a question, 
Mr. Chairman, concerning that statement. 

CHAIRMAN BURTON: If Senator Baca's 
finished. 

SENATOR BACA: Then one follow-up question 
in reference to that area. 

Most of the employees that work right now, 
most of them that I've heard, they're pretty much in favor 
of AB 60 out there; is that correct? 

MR. CENTER: It's my understanding, yes, 
sir. 

SENATOR BACA: So, it's positive for the 
state of California in improving the quality of life? 

MR. CENTER: I think that was discussed a 
lot during the prior hearings on the eight-hour day. And I 
think there was compelling arguments for flexibility. 

But elimination of the eight-hour day I 
don't think was good for the employees in California. And 



AB 60 brings the eight-hour day back. 

CHAIRMAN BURTON: Senator Knight. 

SENATOR KNIGHT: Thank you, Mr. Chairman. 

You indicated that you didn't see an exodus 
of businesses and people leaving the state as a result of 
the increase in minimum wage. 

But I suggest that all of those things added 
up to the fact that businesses are leaving California. For 
example, in Northrup, just moved a segment of their 
operations to North Dakota because it's cheaper to do 
business there than it is in California. 

I've talked to military people who say the 
cost of doing business in California is extremely 
expensive, and if we could get the bases out of California, 
that's what we'd do. 

You're telling me that it's not a problem in 
California? 

MR. CENTER: On the minimum wage, I don't 
think Northrup pays minimum wage to their employees. I 
think they're covered by collective bargaining agreements. 

SENATOR LEWIS: One follow-up question just 
in response to Senator Baca's question. 

You said you didn't think there 'd be any 
kind of an exodus of business based on Assembly Bill 60 
passing. 

Do you think in the last twenty years there 
was ever a period of time in California where the 
regulatory climate or the level of taxation was so high 



that we had any kind of an exodus of business leaving 
California to go to other states? 

MR. CENTER: Well, the last ten years, I 
represent construction workers, and that's pretty much 
where I concentrated my efforts on. We had a low time in 
construction, but it was because of a recession in 
construction work. Now we have interest in construction, 
so our employers have increased in California instead of 
decreased, the construction employers that I work with. 

SENATOR LEWIS: One more time, over the last 
twenty years, was there ever a period of time in the State 
of California where you thought that we were losing 
manufacturing jobs or other types of jobs to other states 
because of the competitive disadvantages that were inherent 
in the California economy? 

MR. CENTER: I couldn't answer that, Senator 
Lewis . 

CHAIRMAN BURTON: Moved by Senator Hughes. 
Call the roll. 

Support? Briefly. We have a full agenda. 

SENATOR SOLIS: Thank you, Mr. Chairman and 
Members . 

I'm proud to stand here with Chuck Center. 
As you know, he was appointed by our last Governor and has 
served the IWC very well. He's been on many issues, 
working even-handedly . I think he has the qualifications, 
know he will do the right thing and follow in pursuit of 
economic opportunities for Californians. 



Urge your Aye vote. 

CHAIRMAN BURTON: Who were you appointed by? 
Governor Wilson. 

MR. CENTER: Yes. 

MR. CAMP: Mr. Chairman, I'm Bill Camp, 
representing the California Labor Federation, AFL-CIO. 

We wholeheartedly support the appointment of 
Chuck Center, and ask that you support his appointment. 

MR. PEREZ: Mr. Chairman, Members of the 
Rules Committee, I'm Jose Perez. I'm here representing the 
California Hispanic Chambers of Commerce. 

We urge an Aye vote on Mr. Center's 
confirmation, and I'll tell you why. 

Some of the questions you raised with 
respect to business leaving the State of California, I 
don't know that it's the minimum wage that's driving 
business out, but maybe some of the other regulatory things 
that impact business. 

As a small business owner, I can tell you 
that there's a whole lot of factors, and it's a lot more 
complicated than to just pinpoint and say that labor cost 
is what's driving business out of the state. 

We need to take a look at our regulatory 
system and enhance it so that it's streamlined and it 
protects small businesses in a better way. 

We think that Mr. Center's confirmation is 
important. We've begun dialogue with the labor groups and 
business to try to look at some of those tough policy 



issues with respect to the minimum wage, the eight-hour 
overtime issue. 

And so, we're confident that he would be a 
fine appointment. We urge an Aye vote. Thank you. 

CHAIRMAN BURTON: Name, organization, and 
sport, please. 

MS. BARAJAS: Hi, good morning. 

My name is Griselda Barajas, and I'm with 
the Sacramento Hispanic Chamber of Commerce. I am Vice 
President of Business Advocacy, and I'm here in support of 
Chuck Center. 

Thank you. 

MR. SANCHEZ: My name is Rafael Sanchez, 
and I'm the Finance Chairman for the United States Hispanic 
Chamber of Commerce. 

We're here in sport of Chuck Center, who 
we've worked well with over the last couple of years. 

Thank you. 

MR. CREMINS: Tim Cremins, Operating 
Engineers, in full support. 

MR. WINSTEAD: Joe Winstead, Director of the 
California State Pipe Trades Council. We're in support of 
Chuck. 

MR. MONAGAN: Michael Monagan, on behalf of 
the Sheet Metal and Air Conditioning Contractors. We're in 
support. 

MR. McFETRIDGE: Jerry McFetridge, State 
Building and Construction Trades Council. 



10 



MR. BERNACCHI: Eddie Bernacchi on behalf of 
National Electrical Contractors Association. We're in 
strong support of Mr. Center. 

MR. CONATY: Pete Conaty, representing the 
State Association of Electrical Workers and Sheet Metal 
Workers. We're in support. 

MR. HOUSTON: Bob Houston, Concrete 
Contractors, in support. 

CHAIRMAN BURTON: Opposition? 

Moved by Senator Baca and Hughes. Call the 
roll. 

SECRETARY WEBB: Senator Baca. 

SENATOR BACA: Aye. 

SECRETARY WEBB: Baca Aye. Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Five to zero. 

CHAIRMAN BURTON: Congratulations, Chuck. 

MR. CENTER: Thank you. 

CHAIRMAN BURTON: Rusty Areias, Director of 
Parks and Recreation. 

Senator Costa. 

SENATOR COSTA: Thank you very much, 



11 



Mr. Chairman, Members of the Committee. 

As a former colleague of ours, obviously Mr. 
Areias needs no introduction. However, I do want to tell 
you that the fact is — that's any way you want to take it, 
Senator Knight. The fact is that this individual I've 
known for seems like most of my life. 

He is dynamic. He is energetic, and he is 
creative. I believe that he is going to take what has been 
traditionally in the past rather a back water Department 
with the state, and really allow it to develop and blossom 
in a fashion that I think will be beneficial to all 
Calif ornians. 

The fact of the matter is that with his 
creativity, and his tenaciousness, and his talent, I think 
that there are going to be park and recreational 
opportunities for Californians that we have not seen in 
many, many years. And I think he has the ability to be one 
of the best Directors of Parks and Recreation that we've 
ever had in the State of California. 

I wholeheartedly recommend him, and I ask 
that you confirm him this morning. 

CHAIRMAN BURTON: Thank you, Senator. 
Rusty, I think we all know your background, 
so why don't you tell us your plans for the State Park 
system. 

MR. AREIAS: That you, Mr. President and 
Members . 

Before I do that, I want to introduce to you 



12 



my wife, who I think maybe some of you know. My wife, 
Julie, who is here, and we're expecting our first child in 
October, October 27th. Thank you. 

Julie, if the questioning gets too tough, 
stick your stomach out and start to cry. 

Anyway, I was asked by the Governor on 
March 1st, Mr. President and Members, to take over this 
responsibility. And I had served with Senator Costa when 
he was an Assemblyman on the Water, Parks, and Wildlife 
Committee, and worked for parks in my district, just like 
you did in yours in representing the areas that we all come 
from. 

But what I found when I got there was a 
Department that had been through 15 very difficult years. 
We were all a part of that. We worked during that 
difficult time together when revenues were very short, and 
parks were not always, in fact, were rarely at the top of 
anybody's priority list. Kind of first in their heart and 
last on their list when it came to money. 

In fact, last year was the first time we'd 
gotten an augmentation for deferred maintenance — that's 
resource maintenance, cultural maintenance — since the 
Park Department manages and interprets the cultural 
resources of this state. And that was for $30 million. 

And we have a backlog, depending on who you 
want to believe, of somewhere between 70 million and a 
billion dollars. And the reason that figure is so 
ambiguous is that when you're dealing with historical 



13 



artifacts, it's sometimes difficult to know exactly what 
you're getting into in terms of the expense; whether it's a 
Hearst Castle, or Sutter's Fort, or Glen Ellen, Jack 
London ' s home . 

But what I did find there was the most 
committed staff of people that I have ever seen or 
experienced in state government. They are committed to 
that park system. They are like a family. They work very, 
very hard, and I will tell you that we balanced our budget 
on the backs of those people in the last 15 years, like a 
lot of other state workers. 

But the reason that Department has held 
together, the 265 venues, is because of the extraordinary 
commitment that they've made to the people of California 
and to this park system. Whether it be the maintenance 
supervisors, the superintendents, the part-time employees, 
it's an incredible work force that we have there. 

My plans for the system, first, was to 
secure funding, which I was pleased when the Governor put 
$157 million into deferred maintenance priorities. That's 
going to go a long way toward resolving some of the short 
term problems. Because as all of you know, at some point 
deferred maintenance becomes capital outlay. And when 
you're dealing with cultural resources, at some point you 
lose it entirely. The cultural resources of this state are 
lost if you don't invest in them. 

The other area that I'm focusing in on, and 
this is consistent with what the Governor told me when he 



14 



asked me to take over this responsibility. He said, 
"Rusty, dissect this Department from top to bottom, and go 
through each division, division by division, department by 
department." And we are in the process of doing that. 

I'm pulling together what I believe is a 
world class team of professionals. My three chief 
deputies -- Dr. Denzel Duardo, who's here, is Chief Deputy 
for Administration; Mary Wright, who was Superintendent of 
the Monterey District and used to run the Training Center 
at Asilimar, the Mott Center; and Ken Jones — have a 
combination of about 80 years' experience working in state 
parks. And the rest of the team that I am putting together 
is, I think, going to take this Department to new heights, 
combined with the commitment by the Governor and the 
Resources Secretary to give us the financial support we 
need. 

I'm concerned about the visibility of state 
parks. You know, in California, for all its magnificence, 
a park is park is a park. Ask people today at lunch what 
their favorite state park is, and they think for a minute, 
and they say, "Yosemite." While Yosemite was our first 
state park, Yosemite 's a national park. Teddy Roosevelt 
wrangled it from us shortly after the turn of the century. 

One of my initiatives is to assemble a group 
of people. Gordon Van Souter, formerly President of CBS 
and the head of the PBS station here, has agreed to 
Co-Chair this committee with me, and we are assembling a 
group of people who will talk about how we bring greater 



15 



visibility and appreciation to our state park system 
without crossing that line into the commercial world that I 
think our parks are refuges from. 

CHAIRMAN BURTON: I've got a question. 

How much money in the budget? 

MR. AREIAS: 157 million. 

CHAIRMAN BURTON: That's good. 

Now there's two or three park bond issues. 
I think the Speaker's got one, Hayden's got two. 

Have you had a chance to discuss with the 
Governor what he thinks would be an acceptable level of, 
shall we say, park bonds for the ballot yet? 

MR. AREIAS: Mr. President, we talked 
briefly about it at the time that he asked me to take over 
this job. He said he wasn't sure what that number was. It 
would depend on the other competing interests. 

But I will tell you this. That I know in 
the early polling that has been done of 69 percent support 
for a park bond issue at one $1.5 billion. So, it's very 
clear to me the $2 billion bond issue would be supported in 
this state, and maybe higher than that. The need is 
certainly there. We haven't had a park bond in twelve 
years, as you know, in California. 

CHAIRMAN BURTON: Actually, the Chamber of 
Commerce polled a transportation bond that said the people 
would go for $16 billion in one fell swoop. 

MR. AREIAS: And I think that's terrific 
because there was a lot of mitigation money in there. 



16 



CHAIRMAN BURTON: Then the other issue, I 
think you ought to talk, when you talk to the Governor, 
he's talked a little bit in terms of almost combining water 
and park as a, quote, "resource bond". I think at some 
point when the budget's over, it would behoove you, as well 
as those of us in the Legislature, to just try to get a fix 
from the Governor on just where it's going to be. Because 
we've got, for the want of a better word, water, parks, 
housing, transportation, and God knows what else. 

Senator Lewis. 

MR. AREIAS: Senator, one trend that I've 
noticed at least in the Speaker's bond bill, is that more 
and more dollars going to city and county parks, and less 
to the state parks. In the past, it's been kind of 
one-third/one-third formula. 

You know, a year ago, the past 
administration gave up seven parks in Los Angeles County, 
including Olivera Street, and seven beach parks. And you 
know, Los Angeles County is very important in terms of 
passing everything and anything in this state. The state 
parks need a presence there. 

CHAIRMAN BURTON: Senator Lewis. 

SENATOR LEWIS: Good morning, Rusty. 

MR. AREIAS: Good morning, Senator. 

SENATOR LEWIS: I guess the first thing I 
have to ask you, to clear the air on this, are you now or 
have you ever been a member of any gang. 

[Laughter. ] 



17 



MR. AREIAS: Only for a short time in my 
youth. I think the statute of limitations has run out on 
it. 

SENATOR LEWIS: I was curious, have you 
tendered your resignation yet as a member of the Coastal 
Commission? 

MR. AREIAS: I have. 

SENATOR LEWIS: Senator Hayden has a piece 
of legislation going through the process right now. It's 
Senate Bill 1277 , that would prohibit the building of 
public roads through state parks. 

Have you looked at that? Do you have any 
thoughts on that? 

MR. AREIAS: I have looked at it, and I'm 
familiar with the catalyst of the villains, the San Onofre 
Park, as you're aware of, in Orange County. 

While there are technical problems with the 
bill that we're trying to work out with Senator Hayden, 
we've taken no official position. I generally support the 
bill. 

I think it's a mistake, typically, when 
developers come in, or Caltrans comes in. They want to 
take the course of least resistance. Many times, our state 
parks, wetlands and others, open space, provide the course 
of least resistance. 

I understand there are problems as it 
relates to that particular piece legislation. I think it's 
on the Senate Floor at this time. I don't know if 



18 



Mr. Hayden's got the votes or not. 

SENATOR LEWIS: My understanding is that 
about a little less than 30 percent of the Department's 
ongoing operations and maintenance costs are funded through 
the fees that are imposed on park users. 

MR. AREIAS: Correct. 

SENATOR LEWIS: How does the Department 
determine what the appropriate level of fees to charge 
people? 

MR. AREIAS: I think during last 15 years, 
the attitude has kind of been whatever the traffic will bear, 
Senator. With the fiscal challenges that the past two 
administrations faced, there was more and more pressure on 
parks to become self supportive, more and more self 
supportive. 

And I think, in my estimation, our fees in 
the Department in some cases are too high. As an example, 
if someone takes their dog to the park, we charge them a 
dollar. That raised a total of $35,000 last year. Either 
a lot of dogs are sneaking into our parks for free, or, you 
know, something's wrong. 

But I can tell you that the people that are 
collecting those fees, and I refer to them as nuisance 
fees, really get a lot of flack from our park users. 

If you show up with your family, with a 
rubber boat on top of your car and a stationwagon full of 
kids, they charge you two bucks for that rubber raft. It 
raised a total of $6,000 last year. I think it's a 



19 

mistake. 

I think the fees in our parks presently are 
too high. I think there's some things in our society that 
ought to be free or nearly free. 

If you want preferential parking at Huntington 
State Beach, or Santa Monica Beach, then you ought to pay for 
it. If you want to stay overnight at a campground at state 
parks, then you ought to pay for it. But I think we ought to 
keep our parks as accessible as possible. Churches, parks, and 
libraries in our society should be free or nearly free, in my 
estimation. 

SENATOR LEWIS: There's a number of 
restrictions that have been placed on public access on at 
least some of the park lands. 

If somebody is concerned about the denial, 
whether they're an off-roader, or a camper, or something 
like that, if somebody's concerned about their ability to 
access state park lands for their use — 

MR. ARE I AS: Right. 

SENATOR LEWIS: — what kind of appeals 
process is there for them to go through? 

MR. AREIAS: Well, you know, typically what 
happens, and, I mean, it depends where it is. If you you're 
talking about a coastal park, like Oceana Dunes or Blacks Beach, 
we were approached on the Coastal Commission by the Bureau of 
Land Management, who wanted to prohibit vehicle use on Blacks 
Beach. And they made their case, and others made their case. 
And the decision was by the Coastal Commission to prohibit the 



20 



vehicular use. 

Oceana Dunes, by contrast, is the one area 
where there's very intense use. In fact, I'll be going 
there this weekend to see it for the first time in quite a 
while . 

What they would have to do, if it's on the 
coast, they would have to petition the park. They would 
have to cite the precious resources that are being 
destroyed. You know, we have tremendous natural resources 
in the Department. 

And the idea behind the Green Sticker 
Program and OHV use is to concentrate that particular 
activity, which is a very popular one, in areas where 
you're -- that are appropriate for it, basically. And 
finding those areas is not always easy. And as California 
grows, we get into more and more conflicts, conflicting 
constituencies. So, they would come to the Parks; they 
could petition the Director. If it's on the coast, they 
could petition the Coastal Commission. 

I will tell you that I have, once I get 
appointed, providing that the Governor makes the 
appointment, I've brought in a person that I believe will 
work very effectively between the environmental groups and 
the off-road vehicle users to manage a lot of those 
conflicts before they get out of hand. I think that's very 
doable. 

We're not only Parks, but we're also 
Recreation. We've got to sell what people are buying. OHV 



21 



use is very popular in California. 

SENATOR LEWIS: Right. 

Last question. The last time that you were 
up for your appointment to the Coastal Commission, some 
Members of the minority party had some concerns relative to 
the timing as to whether or not it was a legitimate 
appointment/ or whether it was a potential political 
stepping stone. 

What's your commitment relative to 
fulfilling your term in this position? 

MR. AREIAS: My plan is to stay, stay on as 
Parks Director. Eventually, I want to get back into the 
private sector. 

Mr. Lewis, I come from a dairy and farming 
background, and I have a love — 

CHAIRMAN BURTON: Wouldn't that question be 
better put to Julie? 

MR. AREIAS: But the Governor asked me to 
stay on through this term, and unless he calls and asks me 
to do so something else, that's what I plan to do. 

SENATOR LEWIS: Thank you. 

CHAIRMAN BURTON: Senator Hughes. 

SENATOR HUGHES: I miss your garlic 
festival. It's never been the same. 

I wanted to ask you, Rusty, how do you feel 
the Department, and you said that you've visited with the 
staff and what-have you, is doing in the area of equal 
employment opportunity? 



22 



MR. AREIAS: Not well. Not well at all. 

SENATOR HUGHES: What do you plan on doing 
to gear them up. 

MR. AREIAS: What I am planning to do, and 
for all their best efforts, and I will tell you that this 
Department has really strived to bring greater diversity of 
women and minorities to the Department, but they've failed 
miserably. 

I think the reason that they have is that we 
have very high educational standards. To come to work for 
the Department of Parks and Recreation, you've got to have 
a college degree. And what I think has happened in the 
past is that minority applicants who might choose a career 
in Parks, when they look at their other opportunities have 
taken jobs that better compensate them. 

One of our biggest problems in the 
Department is, we have Ranger lis at the top of their 
field, 20 years on the job, making a little over $3,000 a 
month. They're now going to sheriff's departments where 
they can make a lot more money, not because they want to 
leave, but at some point, you've got a mortgage to pay, and 
you've got children to support, and a retirement to plan 
for. 

So, what I plan to do is, one, one of my 
chief deputies for — one of my deputies for external 
affairs is a man named Cedric Mitchell. Cedric was Senator 
Patrick Johnson's district chief for a good number of 
years. That's going to be one of his responsibilities. 






23 



We not only need diversity within our ranks, 
which we will achieve, but we also need a more diverse 
population to utilize our parks. 

You know, the Parks Department is an 
environmental agency, and we look like the environmental 
movement. I think once we get greater participation and 
diversity to our parks, it will be easier to recruit people 
to a career in Parks. It's one of my highest, if not my 
highest, priority. 

In order to serve the people of California, 
you've got to look like California. You've got to be a 
part of California's collective experience. 

SENATOR HUGHES: Have you thought of how you 
could admit any of those people who have had experience in 
the Conservation Corps? They have been really indigenous 
people to inner cities. I would think that a lot of those 
people who, years ago, worked in that, would be interested 
in a career with the Parks Department. 

Are you thinking of opening up an 
opportunity for those people? I want you to think about 
it. 

MR. AREIAS: I have thought about that. I have 
thought about that. 

SENATOR HUGHES: How dedicated are you to 
historic and cultural preservation? I know that there are 
many historical sites, and as you bring tourists to our 
state, I think that there's not enough emphasis in these 
wonderful opportunities for people to visit these sites. 



24 



How high is this on your radar screen yet, 
if at all? 

MR. AREIAS: It's very high. The incredible 
resources that we have, the coastal resources we have in 
the system, I mean, it's a treasure. Within my efforts to 
raise the visibility of state parks, I want to make people 
more aware of just what's there. 

The warehouse we have in West Sacramento, 
two huge warehouses full of cultural artifacts. The finest 
California Indian basket collection in the world, and the 
public doesn't have access to it. 

CHAIRMAN BURTON: Thank you. 

Senator Baca. 

SENATOR BACA: First of all, I appreciate 
the fact that you had appeared at a joint meeting the other 
day and talked about Parks and Recreation, and need for 
outreach. I think it's very important, because as we're 
looking in that direction, it seems like there's not a lot of 
outreach. So, I do appreciate your taking a stand in 
reference to doing that, and coordinating and 
communicating . 

And I appreciate the fact that you've 
indicated that you'd like to lower the fees as well because 
it's very difficult for a lot of poor and disadvantaged 
individuals to utilize those parks. 

My question is, you look at a lot of the 
parks, and you look at the appropriation of the dollars, 
hopefully, during your administration and during your time, 



25 



that you or members of your staff will have an opportunity 
to look at which ones really need to be upgraded. I'm sure 
that there are some in the Inland Empire that need some 
assistance or help in that area. 

Do you plan on visiting the sites to find 
out which ones need to be upgraded in terms of the 
equipment that they need? 

MR. AREIAS: I plan on visiting every single 
state park during my time as Director. 

But we have an inventory. We have a system 
of 23 districts, 23 superintendents, maintenance chiefs, 
chief rangers. So, we're very aware what the needs are out 
there. 

I will tell you, the real saviors in our 
park system in the last 15 years has been the maintenance 
chiefs that have kept this operation running with bubble 
gum and paper clips and nail polish. 

When I go to a district, I meet with the 
superintendents, maintenance chiefs, and the chief ranger, 
and I treat them as equals. I have them up here. You 
know, the maintenance chiefs, they are the real heroes that 
have kept things going. 

SENATOR BACA: To just show that I have no 
personal grudges, I move the nomination. 

CHAIRMAN BURTON: Senator Knight. 

SENATOR KNIGHT: I'm aware of a fish 
hatchery in the Owens Valley. Mount Whitney Fish Hatchery 
is a historical site. I think there's some funding in the 



26 



budget for that. 

Are you aware of that facility? 

MR. AREIAS: A fish hatchery must be 
operated by Fish and Game. 

SENATOR KNIGHT: It's been designated as a 
historical building. It certainly doesn't look like a 
fish hatchery, I'll tell you. 

CHAIRMAN BURTON: Are you for it or against 
it. Senator? 

SENATOR KNIGHT: I'm supportive of it. I 
want him to support it. And I want to make sure he keeps 
the money in the budget. 

MR. AREIAS: I'll go visit it with you, 
Senator Knight. 

CHAIRMAN BURTON: Let the record reflect. 

Could those who support Rusty stand, please. 



Thank you. 



Any opposition? 

Seeing none call the roll. 

SECRETARY WEBB: Senator Baca. 

SENATOR BACA: Aye. 

SECRETARY WEBB: Baca Aye. Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 



27 



1 CHAIRMAN BURTON: Aye. 

2 SECRETARY WEBB: Burton Aye. Five to zero. 

3 MR. AREIAS: Thank you, Senators. 

4 CHAIRMAN BURTON: Let the record reflect 

5 that Mel Varrelman, Supervisor, District 3 in Napa, doesn't 

6 think too highly of the nomination. 

7 Congratulations. 

8 MR. AREIAS: Thank you. 

9 [Thereupon the Rules Committee 

10 acted on legislative Agenda Items.] 

11 CHAIRMAN BURTON: Edwin Lowry, Director of 

12 Toxic Substances Control. 

13 Senator Escutia. 

14 SENATOR ESCUTIA: Thank you, Mr. Chairman 

15 and Members. 

16 I am here this morning to ask your support 

17 of Ed Lowry 's confirmation as Director of the Department of 

18 Toxic Substances Control. 

19 As the Senate proceeds in the nomination of 

20 new agency and department heads, I guess the obvious 

21 question is, what type of leadership qualities are you 

22 looking for? I think in order to head this Department, you 

23 obviously need someone with intelligence, commitment, and a 

24 great sense of humor in order to navigate what can at times 

25 be a department of treacherous waters. 

2 6 Well, the man that I have the honor of 

27 introducing today is a man of great integrity and 

28 character, and obviously, he possess the gift of navigating 



28 



through rough waters. 

I've worked with Ed closely for several 
years now on important environmental issues. It was his 
uncanny ability to bring parties together and to also 
fairly arbitrate two polar opposites that we were able to 
come up with Assembly Bill 11, which basically overturned 
polluter loopholes, while at the same time, maintain 
acceptable business flexibility. 

Ed played a critical role in the success of 
that bill by bringing both the environmental and the 
business communities together in a mutual consensus. I was 
extremely impressed with Ed's understanding of the issues, 
but most importantly, I learned from him that you can bring 
people together toward a common solution. 

It was always a pleasure to work with Ed 
because he is a man that possesses both strong legal and 
environmental background, with also a dry sense of humor. 

He is also a graduate of Yale University, 
Stanford Law School, and he has worked in various 
capacities, including: Public Defender of Contra Costa 
County; a deputy city attorney in San Francisco; as well as 
a deputy attorney general in environmental issues. 

Throughout Ed's career, he has held the 
belief that a healthy environment is a law enforcement 
issue. And it is truly evident from the causes that he has 
dedicated his life to that he is a man of vision and 
ambition, but also a man who is practical and pragmatic, 
and understands the way that, at times, what you need to do 



29 



in order to bring people together is to compromise, and to 
seek that compromise. That in itself is goal to be 
treasured. 

I know that Ed will be an excellent Director 
of the Department of Substances Control, not only for his 
experience and expertise, but his values and personal 
character. 

Members, it is with great honor that I 
introduce to you Mr. Ed Lowry. 

MR. LOWRY: Thank you, Senator Escutia. I'm 
honored by your introduction. I'm honored to be here and 
to have been appointed by the Governor to this important 
post. 

With the President's consent, I'd like to 
introduce my family that's been here, been able to come 
here. Susan Underwood, my wife and able Deputy Attorney 
General; and my stepson, Ben Steiner. We also have Sabrina 
Steiner, who elected to sleep in this morning, and a 
three-year-old daughter Molly, who is at the Rainbow Day 
Care Center in the Water Resources Building. I think we're 
all glad that she's still there today. 

I have a few brief remarks. I'm happy to go 
to questions at any point that the Committee would like. 

I followed Mr. Areias in two committee 
hearings now; this is the second one. And I always feel a 
bit at a disadvantage when he talks about the beauties of 
the parks which he oversees, and the wonderful goal of 
making parks available to people. 



30 



But thinking about that, I think that one of 
the things that the Department of Toxics does, and we have 
done well in many situations, and we will continue to do 
well, is to convert land which is now polluted to better 
uses. I think the California Speedway in Senator Baca's 
district is probably the best motor race track in the 
world. And that rose from the disintegrating remains of 
polluted grounds of the Kaiser Steel mill. 

We've got -- we're nearly at the end of 
almost a decade-long effort in Senator Knight's high desert 
region near Mojave, cleaning up about two dozen polluted 
sites: metal smelters; metal recovery junkyard sites. I 
started that work about a dozen years ago with the Attorney 
General's Office, and it's nice to see that we're nearly at 
the end of that. 

We're working hard with the Marines at Camp 
Toro to make sure that the public is protected there. And 
we're working to transfer lands to a military facility 
that's public use in the President's district. 

I hope — 

CHAIRMAN BURTON: What are you doing for 
her? 

[Laughter. ] 

SENATOR LEWIS: That's why we need 
environmental justice. 

CHAIRMAN BURTON: He's doing the district 
pretty good. 

SENATOR HUGHES: If he didn't get to me, I 



31 



1 was going to get to him. 

2 CHAIRMAN BURTON: I understand that. Give 

3 him a shot before you shoot him. 

4 Make it up. 

5 [Laughter.] 

6 SENATOR HUGHES: He doesn't have to. 

7 MR. LOWRY: What we're doing for Senator 

8 Hughes' district is working very hard on number of school 

9 sites, primarily in Los Angeles County, which are a danger 

10 to children as they are now. We're working hard, created 

11 a special Schools Team to analyze and work with various 

12 school districts, and L.A. Unified School District being 

13 the primary one, to make sure that our children who are 

14 going to schools, are going to schools at clean sites. 

15 As you on the rostrum know, there are a 

16 number of bills going through the Legislature right now. I 

17 expect it's likely one or more of them will be directing me 

18 and my Department with what to do so with schools, and 

19 we're ready to do that. 

20 CHAIRMAN BURTON: Let me stop you and ask 

21 you a question on that. 

22 I see that basically you've set up a special 

23 Schools Team to assist in identification assessment and 

24 remediation of the problems at these sites. 

25 Then there seems to be three, four, five — 

26 a lot of bills dealing with the problem of toxics more as 

27 they would affect your kids than they would the people 

28 sitting here as adults. 



32 



MR. LOWRY: Correct. 

CHAIRMAN BURTON: Are you just going to let 
the Legislature work its will, let the Governor work his 
will? Or, have you had input on that, because you seem to 
be ahead of us anyway. 

MR. LOWRY: Correct. What we have done to 
date is met many times, I personally and more times my 
staff, with the various authors of these bills, answering 
questions and suggesting changes which would, in our view, 
make it possible for us to do what their bill seeks to do 
so. 

We've been, in some sense, equal opportunity 
advisors to each of these Members because I think they're 
all trying to go to the same direction, which is to make 
sure that school sites, school lands, both in the future 
and those which are already built, are safe. 

The final point of your question is, are we 
going to see which bill is passed, and yes, we will do 
that. We are not advocating one bill over another at this 
point . 

CHAIRMAN BURTON: Senator Lewis. 

SENATOR LEWIS: How many sites does the 
Department currently have on a Superfund list? 

MR. LOWRY: There is a Cal. Sites List which 
I think has 4,000 sites, if I'm not mistaken. We are not 
working on all of those sites. One of the things which we 
need to do is to identify which of those sites shouldn't be 
on the list and which should be on the list. 



33 



1 We have a data base which has been neglected 

2 in the last few years in terms of whether they're actually 

3 accurate or not. 

4 SENATOR LEWIS: If you were to freeze the 

5 list presently, how long would it take, do you think, to 

6 clean up everything, and what would the cost be? 

7 MR. LOWRY: It would take a very long time. 

8 And not to be cute, we have the Casmalian site, for 

9 example. The estimated cost to clean that up is $4 00 

10 million. 

11 SENATOR LEWIS: What site? 

12 MR. LOWRY: Casmalia, $400 million, and I 

13 think a 200-year ultimate clean out. So, it is a long 

14 time. 

15 I have not attempted to figure out what the 

16 cost is. And bear in mind that the state does not pay all 

17 those costs. We recover them elsewhere. 

18 SENATOR LEWIS: Senator Sher's Senate Bill 

19 47, one of the things it did was that it required the 

20 Department to adopt regulations for ranking the various 

21 sites in terms of priorities. 

22 What factors are you using in coming up with 

23 the regulations to determine that ranking? 

24 MR. LOWRY: Well, this bill, of course, was 

25 only enacted a few weeks ago. 

26 We are putting together a team to put those 

27 regulations together. But the factors which we would look 

28 at is: what is the level of pollution; what is the risk to 



34 



receptors; what's the risk to sensitive receptors. 

I think we would need to bifurcate those 
sites which have responsible parties able to pay and those 
which don't. You know, there's subsequent legislation 
which we need to fund the Orphan Share Fund of the Sher 
bill. 

SENATOR LEWIS: Have you identified the 
source of funding yet for the Orphan Share Fund? 

MR. LOWRY: There are — the only 
identification which I have heard of is a joint industry 
general fund contribution to that fund. And I believe that 
the parties are negotiating how much we need to get into 
that fund right now. 

SENATOR LEWIS: Stringfellow was identified 
as a federal Superfund site back in *83? 

MR. LOWRY: Correct. 

SENATOR LEWIS: They're still cleaning it 



up 



on? 



Senator. 



How much longer is this going to go 



MR. LOWRY: That's another 200-year project, 



I think actually Stringfellow is a success 
story, in that we have now contained the plume from that 
site. It is not moving any more. We've got very complex 
or extensive wells, dams, and remediation technology, but 
it will take a long time. 

SENATOR LEWIS: In terms of the surrounding 



35 



water quality, the leaching problem and everything, you've 
got that under control now? 

MR. LOWRY: We believe that is completely 
under control at Stringfellow. 

SENATOR LEWIS: Thank you. 

CHAIRMAN BURTON: Senator Hughes. 

SENATOR HUGHES: Thank you very much for 
being here today, and thank you for your concern about 
school sites. 

L.A. Unified has a system of asking for soil 
samples when they get ready to build on a site. 

Is a soil sample sufficient enough to 
determine that that's a safe site to build on? Or what 
else should we do, and will your Department be giving 
directions or guidelines to school districts so they do a 
more thorough job? 

MR. LOWRY: Simply sampling soil is not 
adequate to do the entire job. 

We have a process which starts with 
something called a preliminary assessment. That's often a 
historical look at the school or the school site. 

From that historical background, interviews, 
literature, sometimes just walking the site; you, can get 
an idea that there may be a problem there. 

You follow that up with soil sampling, 
sometimes ground water testing, sometimes air monitoring to 
determine what is the site and what needs to be done. 

I anticipate that one way or another, we are 



36 



going to be brought into the process, and brought in 
willingly, to assist in overseeing the preliminary 
assessments and the subsequent work at these sites. 

And the guidelines which we have developed 
and regulations which we already have will be used for 
that, and we will modify them as we need to. 

SENATOR HUGHES: I told you in your 
interview with me that I was aware of a potential site in 
Exposition Park near an armory. And an armory would have 
potential dangerous material buried beneath the ground. 

What would be your agency's roll in 
something like that? What would you be looking for, and 
how long would it take to do so anything about that? 

What I'm asking you, as you enter this new 
job, if you know that a particular site was a former 
armory, would you have a guideline, then, for any site that 
you know was a former armory, just like you would have a 
guideline for any site that you knew was a former gas 
station? 

MR. LOWRY: We have, I guess, what you'd 
call specialists in the Department who — I don't know if 
it's a blessing that we've had military base closings, but 
the one good thing out of that is, we do have experience in 
looking at what has been at armories or military bases and 
so forth. We're working on them. 

Our experts would look both to what 
industrial processes there were at an armory, and what was 
stored there. There could be a great number of many 



37 



solvents, fuels, and you get into munitions, unexploded 
ordinance, and those problems. We look at all of those 
issues. 

SENATOR HUGHES: So that school districts 
could no longer plead innocence. If they know what the 
site was previously, they would have a guideline to know 
what they have to look for. So, soil samples would not be 
sufficient? 

MR. LOWRY: I agree with your conclusion; 
soil sampling is not sufficient. And I do think that 
throughout the state, and especially in your area of the 
state, school districts are now on notice, acutely aware, 
and actively involved in making sure that their sites 
are — 

SENATOR HUGHES: And I do have a commitment 
from you that you will look at this site in Exposition Park 
and assist L.A. Unified, because they don't have the right 
guidance. 

MR. LOWRY: Right. I will repeat the 
commitment I made to you in the office. 

SENATOR HUGHES: All right, thank you. 

CHAIRMAN BURTON: Senator Baca. 

SENATOR BACA: Thank you, Ed. First of all, 
I appreciate the fact that you are working in reference a 
lot of the military base closures. We've had a series of 
those that have been closed and converting those. And I do 
appreciate the fact that you've worked on others in 
reference to the California Speedway. 



38 



My question is in reference to toxics in 
fertilizers. You know, that has been a concern right now, 
especially when a lot of the farmers and the public are not 
informed. 

What ideas or situations do you have to 
remedy the problem? 

MR. LOWRY: The problem, as I am approaching 
it with toxics in fertilizers is that by-products of 
certain industrial processes create wastes, some which are 
good, and some which are bad. And zinc is one heavy metal 
which is a pretty good fertilizer in a lot of situations. 

So, there's both an opportunity and a 
challenge with waste fertilizers. The opportunity is, we 
can deal with waste in a beneficial way. 

The challenge is that not only do you have 
good metals, but you've got other bad metals and products 
which are along for the ride. And the challenge for us is 
to clearly define what — how much of those other metals on 
for the ride should be allowed through; what technologies 
are there to get them out of there; and what information 
should go to both farmers and consumers when those 
fertilizers are sold and put on the land. 

What I am doing is, I've got a staff in our 
Hazardous Waste Management Division briefing me on 
precisely what are all the both technical and legal 
requirements and aspects of this problem right now. 
Working with Secretary Hickox, who is also working with the 
Department of Food and Agriculture, which is also equally 



39 



involved in this issue. 

We hope to have a coordinated plan for the 
Governor to deal with what is an issue which I know affects 
you and agriculture and consumers in California. 

SENATOR BACA: That's one area that has 
really impacted, especially where I'm at. We have a lot of 
dairies in that immediate area, so a lot of the fertilizer 
there, and a lot of the waste in terms of disposing of it 
is a high cost to the farmers. And it seems like we've got 
to find a remedy to also help in that area and look at what 
you possibly have done. 

Hopefully, you'll look at it. 

MR. LOWRY: I agree. 

CHAIRMAN BURTON: Senator Knight. 

SENATOR KNIGHT: Thank you, Mr. President. 

Mr. Lowry, we've talked about this before, 
but I'd like to have you discuss the certification plan for 
the aerosol can recycling equipment, where we stand there, 
and why it's taken three years to certify, and maybe more 
than that because we haven't certified it yet? 

MR. LOWRY: What you're referring to is the 
Department's Technology Certification Program, and the 
spray can technology, which was presented to the 
Department . 

I think that we've had a certification 
process three years. I think that's about right. Out of 
those 36 months, I've been dealing with the problem for 
about three every those months. 



40 



SENATOR KNIGHT: But you're stuck with it. 

MR. LOWRY: I am stuck with it, I agree, 
assuming that you guys approve me. 

It took too long for a number of reasons. 
One of those reasons is that, for some reason, our staff 
and the proponent of the technology were not communicating 
well together, for whatever reason. We need to make sure 
that we're communicating properly, responsibly, and 
courteously with people who bring technology to us. 

The mechanism for, and the rules and plan 
for certifying technology I don't think, frankly, was well 
defined, and it was not even well defined at the end, when 
we had to look at the impacts of environmental impacts 
through California Environmental Quality Act. 

What I am doing with respect to that is 
directing my deputies to put together a plan which outlines 
in precise order who looks at the technology, what the 
deadlines are, and what other parts of our program 
integrate with the certification process. I think that 
was a major failing in that endeavor. 

SENATOR KNIGHT: In looking at the number of 
people using that piece of equipment and that technology, 
you're ranging from NASA to the Centers for Disease, 
universities, Fortune 500 companies. You know, all of 
those people seem to be using it. 

There are those items available, but we 
can't use them in California. And that presents an 
additional cost to businesses in terms of trying to dispose 



41 

of those aerosol cans. 

MR. LOWRY: I don't disagree. 

SENATOR KNIGHT: I think it's a significant 
issue and one that you indicated in a Wall Street Journal 
article that you didn't look at the economic impacts. You 
only looked at it from a scientific nature. 

Let me ask you a question. If you put 
together a plan, as you indicate, that you do for 
certification, when you put together that plan, and now you 
work all the way through that plan, and you know very good 
and well that it's not going to be cost effective when you 
get through. 

As an example, if you took this piece of 
equipment to dispose of aerosol cans, and you knew that the 
equipment would only be good for, say, 50 cans before it had to 
be replaced, that's not an economically feasible piece of 
equipment . 

Would you continue to certify it? Would you 
go ahead? Would you make that determination as you're in 
the certification process? 

MR. LOWRY: I think what we need to do is to 
have a dialogue between the proponent of the certification 
and us in terms of, here is what the law requires us to 
do. We are required to determine whether the technology 
which is proposed does what the proponent says it does, and 
what are the environmental impacts on that. 

We are also required to put conditions on 
that to limit the environmental impacts. 



42 



I think what we need to do is to be very 
clear with the proponent that, if there is going to be a 
condition, here's what it is, and here's what it's going to 
cost . 

We need to work better with them in terms of 
minimizing those costs or getting other solutions. 

I know with respect to the 200-can limit 
here, I was under the impression that there was good 
scientific literature which the proponent going to present 
to us that stated that there was a good speciation or 
affinity for the constituents with concern with this carbon 
filter and not propane, which we were not interested in. 

They're still welcome to present that to us, 
but we have not yet seen it. 

SENATOR KNIGHT: It brings up the point that 
it's going to cost $3 a can for disposal versus 25 cents in 
other states utilizing the same piece of equipment. That 
makes it economically not feasible within the State of 
California. 

Yet, you're continuing on to try and certify 
this thing. Yet, when you say you don't take into 
consideration economic impacts, I think that's a fallacy in 
your certification plan. 

MR. LOWRY: Well, the statement in the Wall 
Street Journal was actually in answer to a question about 



whether this was the least expensive way to do it. And my 
response to the reporter, which he put a tag into the article, 
was that the major part of what we do is, we look at the 



43 



at the technology; does it do what the proponent says; and 
what conditions should we put on that. 

And the Legislature has not yet explicitly 
directed us to say whether it's a cost effective technology 
or not. 

SENATOR KNIGHT: Is there a law against 
evaluating the piece of equipment or any certification 
plan? Is there a law against evaluating it from an 
economic standpoint as well? 

MR. LOWRY: Well/ I think what the common 
sense of the law would say is, we ought to be cognizant of 
economic effects. I think we would not be meeting the 
letter and perhaps not the spirit of the law if we issued a 
certification, and did so on the basis of economic 
considerations . 

SENATOR KNIGHT: I'm not suggesting that. 

I'm suggesting that you take that into 
consideration, and if you can look at it, and as you 
develop your plan, understand that it's not going to be 
economically feasible, there's no sense wasting all that 
time; is there? 

MR. LOWRY: I agree with that. What we need 
to do is get that information to the proponent early on in 
the process, long before the last three months. 

CHAIRMAN BURTON: Moved by Senator Hughes. 

Witnesses in support, identify yourself. 
Just names and organization quickly. 

MR. CAMP: Mr. Chairman, Bill Camp, 



44 



representing the California Labor Federation, AFL-CIO. We 
wholeheartedly support this witness. 

MR. GEOGHEGAN: Mr. Chairman and Members, 
John Geoghegan. I'm a lobbyist with Kahl, Pownall 
Advocates. We represent a number of public and private 
interests . 

I'm here as a private citizen because I've 
fought against Ed, and we worked with Ed on a number of 
occasions over the last four or five years. He's a great 
guy with a lot of integrity, skill, and capability. 

I strongly support his confirmation. 

MR. WEINER: Mr. Chairman and Members, 
Peter Weiner, Paul Hastings, lobbyist for Environmental 
Technology Council and others. 

We strongly support his candidacy. We've 
worked with him before and since, both for and against. 

MR. COPELAN: Craig Copelan, President Elect 
of Professional Engineers in California Government, 
speaking on behalf of our 10,000 members. 

We are strongly in support of Mr. Lowry's 
confirmation. Thank you. 

MS. SPELLISCY: Sandra Spelliscy with the 
Planning and Conservation League in support of the 
nomination. 

MS. SPARKS: Jody Sparks, Sierra Club of 
California, in support of Ed Lowry. 

MR. AGUIRRE: Dan Aguirre, President of the 
California Association of Professional Scientists. We are 



45 



definitely supportive of Mr. Ed Lowry. 

MS. WILLIAMS: I'm Jane Williams, Executive 
Director of California Communities against Toxics, the 
Coalition for Environmental Justice. 

We're supporting Mr. Lowry 's confirmation. 
Thank you. 

MR. HART: Gordon Hart, here in my capacity 
as a private citizen. 

I've worked with Ed in a variety of 
capacities that — he and I wearing different hats. And I 
find him to be very fair. Support his candidacy. 

CHAIRMAN BURTON: Any opposition? 

SENATOR HUGHES: Move the nomination. 

CHAIRMAN BURTON: Moved by Senator Hughes. 
Call the roll. 

SECRETARY WEBB: Senator Baca. 

SENATOR BACA: Aye. 

SECRETARY WEBB: Baca Aye. Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator 
Knight. Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Four to zero. 

CHAIRMAN BURTON: Leave the roll open. 
[Thereafter, SENATOR KNIGHT 



46 



returned to Committee, the roll 
call was opened, and he abstained, 
thus making the final vote 4-0 
for confirmation.] 

CHAIRMAN BURTON: Congratulations. 

MR. LOWRY: Thank you very much. 



[Thereupon this portion of the 
Senate Rules Committee hearing was 
terminated at approximately 11:51 A.M.] 
--00O00 — 



47 

CERTIFICATE OF SHORTHAND REPORTER 

I, EVELYN J. MIZAK, a Shorthand Reporter of the State 
of California, do hereby certify: 

That I am a disinterested person herein; that the 
foregoing transcript of the Senate Rules Committee hearing was 
reported verbatim in shorthand by me, Evelyn J. Mizak, and 
thereafter transcribed into typewriting. 

I further certify that I am not of counsel or 
attorney for any of the parties to said hearing, nor in any way 
interested in the outcome of said hearing. 

IN WITNESS WHEREOF, I have hereunto set my hand this 

, 1999. 



^y5"~^ day of V^j^^^ 




:ly<n JT~MZZi 
Shorthand Reporter 



377-R 

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